msif-20230630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: to

Commission File Number: 814-00939

MSC Income Fund, Inc.

(Exact name of registrant as specified in its charter)


Maryland			45-3999996
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
1300 Post Oak Boulevard, 8th Floor Houston, TX			77056
(Address of principal executive offices)			(Zip Code)

(713) 350-6000

(Registrant’s telephone number including area code)

n/a

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which

Registered

None

N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The number of shares outstanding of the issuer’s common stock as of August 11, 2023 was 80,446,869.

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TABLE OF CONTENTS


PART I
FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets—June 30 , 2023 (unaudited) and December 31, 2022	1
	Consolidated Statements of Operations (unaudited)—Three and six months ended June 30 , 2023 and 2022	2
	Consolidated Statements of Changes in Net Assets (unaudited)—Six months ended June 30 , 2023 and 2022	3
	Consolidated Statements of Cash Flows (unaudited)—Six months ended June 30 , 2023 and 2022	4
	Consolidated Schedule of Investments (unaudited)—June 30 , 2023	5
	Consolidated Schedule of Investments—December 31, 2022	28
	Notes to Consolidated Financial Statements (unaudited)	46
	Consolidated Schedules of Investments in and Advances to Affiliates (unaudited)—Six months ended June 3 0 , 2023 and 2022	82
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	91
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	108
Item 4.	Controls and Procedures	109
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	110
Item 1A.	Risk Factors	110
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	110
Item 6.	Exhibits	112
	Signatures	113

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MSC INCOME FUND, INC.

Consolidated Balance Sheets

(in thousands, except shares and per share amounts)


	June 30, 2023		December 31, 2022
ASSETS	(Unaudited)
Investments at fair value:
Control investments (cost: $30,923 and $31,120 as of June 30, 2023 and December 31, 2022, respectively)	$	49,408	$	50,303
Affiliate investments (cost: $233,187 and $241,565 as of June 30, 2023 and December 31, 2022, respectively)	278,251		277,000
Non‑Control/Non‑Affiliate investments (cost: $782,432 and $787,201 as of June 30, 2023 and December 31, 2022, respectively)	758,759		740,840
Total investments (cost: $1,046,542 and $1,059,886 as of June 30, 2023 and December 31, 2022, respectively)	1,086,418		1,068,143
Cash and cash equivalents	30,061		21,312

Interest and dividend receivable	10,443		11,917
Receivable for securities sold	1,340		464
Deferred financing costs (net of accumulated amortization of $3,020 and $2,413 as of June 30, 2023 and December 31, 2022, respectively)	2,313		2,908
Prepaids and other assets	2,426		2,420
Total assets	$	1,133,001	$	1,107,164
LIABILITIES
Credit Facilities	$	337,688	$	321,688
Series A Notes due 2026 (par: $150,000 as of both June 30, 2023 and December 31, 2022)	149,006		148,856
Accounts payable and other liabilities	326		1,292

Interest payable	6,623		5,443
Dividend payable	14,009		12,816
Management and incentive fees payable	8,511		7,042
Deferred tax liability, net	3,055		362


Total liabilities	519,218		497,499
Commitments and contingencies (Note I)
NET ASSETS
Common stock, $0.001 par value per share (450,000,000 shares authorized; 80,049,691 and 80,105,999 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively)	80		80
Additional paid‑in capital	684,831		684,165



Total overdistributed earnings	(71,128)		(74,580)
Total net assets	613,783		609,665
Total liabilities and net assets	$	1,133,001	$	1,107,164
NET ASSET VALUE PER SHARE	$	7.67	$	7.61

The accompanying notes are an integral part of these consolidated financial statements

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MSC INCOME FUND, INC.

Consolidated Statements of Operations

(in thousands, except shares and per share amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
INVESTMENT INCOME:
Interest, fee and dividend income:
Control investments	$	708	$	1,039	$	1,517	$	2,040
Affiliate investments	7,405		5,852		15,299		11,058
Non‑Control/Non‑Affiliate investments	25,115		17,448		47,458		34,642
Total investment income	33,228		24,339		64,274		47,740
EXPENSES:
Interest	(8,862)		(5,299)		(17,196)		(9,827)
Base management fees	(4,912)		(4,955)		(9,767)		(9,945)
Incentive fees	(3,599)		—		(6,319)		—
Internal administrative services expenses	(2,545)		(1,302)		(4,584)		(2,483)




General and administrative	(1,306)		(1,037)		(2,185)		(2,075)
Total expenses before expense waivers	(21,224)		(12,593)		(40,051)		(24,330)
Waiver of internal administrative services expenses	2,394		1,149		4,283		2,179
Total expenses, net of expense waivers	(18,830)		(11,444)		(35,768)		(22,151)
NET INVESTMENT INCOME	14,398		12,895		28,506		25,589
NET REALIZED GAIN (LOSS):
Control investments	1,046		—		1,677		—
Affiliate investments	(8,823)		333		(7,186)		779
Non‑Control/Non‑Affiliate investments	(21,075)		39		(19,912)		(154)

Total net realized gain (loss)	(28,852)		372		(25,421)		625
NET UNREALIZED APPRECIATION (DEPRECIATION):
Control investments	(12)		1,207		(698)		1,385
Affiliate investments	16,367		415		17,688		492
Non‑Control/Non‑Affiliate investments	19,402		(12,371)		14,628		(8,894)
Total net unrealized appreciation (depreciation)	35,757		(10,749)		31,618		(7,017)
INCOME TAXES:
Federal and state income, excise and other taxes	(214)		(638)		(524)		(981)
Deferred taxes	(1,833)		(57)		(2,693)		(178)
Income tax provision	(2,047)		(695)		(3,217)		(1,159)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	19,256	$	1,823	$	31,486	$	18,038
NET INVESTMENT INCOME PER SHARE—BASIC AND DILUTED	$	0.18	$	0.16	$	0.36	$	0.32
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS PER SHARE—BASIC AND DILUTED	$	0.24	$	0.02	$	0.39	$	0.23
WEIGHTED-AVERAGE SHARES OUTSTANDING—BASIC AND DILUTED	80,299,938		79,968,597		80,218,416		79,915,291

The accompanying notes are an integral part of these consolidated financial statements

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MSC INCOME FUND, INC.

Consolidated Statements of Changes in Net Assets

(in thousands, except shares)

(Unaudited)


	Common Stock			Additional Paid-In Capital		Total Overdistributed Earnings		Total Net Asset Value
	Number of Shares	Par Value
Balances at December 31, 2021	79,826,605	$	80	$	682,426	$	(69,336)	$	613,170

Dividend reinvestment	533,062	—		4,212		—		4,212
Common stock repurchased	(489,031)	—		(3,790)		—		(3,790)
Net increase resulting from operations	—	—		—		16,213		16,213
Dividends to stockholders	—	—		—		(13,178)		(13,178)

Balances at March 31, 2022	79,870,636	$	80	$	682,848	$	(66,301)	$	616,627
Issuance of common stock	94,697	—		750		—		750
Dividend reinvestment	582,453	1		4,612		—		4,613
Common stock repurchased	(536,065)	(1)		(4,151)		—		(4,152)
Net increase resulting from operations	—	—		—		1,823		1,823
Dividends to stockholders	—	—		—		(12,802)		(12,802)

Balances at June 30, 2022	80,011,721	$	80	$	684,059	$	(77,280)	$	606,859














Balances at December 31, 2022	80,105,999	$	80	$	684,165	$	(74,580)	$	609,665

Dividend reinvestment	564,377	1		4,413		—		4,414
Common stock repurchased	(519,489)	(1)		(3,984)		—		(3,985)
Net increase resulting from operations	—	—		—		12,231		12,231
Dividends to stockholders	—	—		—		(14,026)		(14,026)

Balances at March 31, 2023	80,150,887	$	80	$	684,594	$	(76,375)	$	608,299
Issuance of common stock	255,754	—		2,000		—		2,000
Dividend reinvestment	608,618	1		4,759		—		4,760
Common stock repurchased	(965,568)	(1)		(6,522)		—		(6,523)
Net increase resulting from operations	—	—		—		19,256		19,256
Dividends to stockholders	—	—		—		(14,009)		(14,009)

Balances at June 30, 2023	80,049,691	$	80	$	684,831	$	(71,128)	$	613,783

The accompanying notes are an integral part of these consolidated financial statements

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MSC INCOME FUND, INC.

Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)


	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations	$	31,486	$	18,038
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

Investments in portfolio companies	(112,086)		(120,049)
Proceeds from sales and repayments of debt investments in portfolio companies	95,363		104,933
Proceeds from sales and return of capital of equity investments in portfolio companies	11,451		1,872
Net unrealized (appreciation) depreciation	(31,618)		7,017
Net realized (gain) loss on the sale of portfolio investments	25,421		(625)

Amortization of deferred financing costs	757		697
Amortization of deferred offering costs	63		—
Accretion of unearned income	(4,521)		(2,622)
Payment-in-kind interest	(3,073)		(1,434)
Cumulative dividends	(86)		(506)
Deferred tax provision	2,693		178
Changes in other assets and liabilities:
Interest and dividend receivable	1,474		2,753

Prepaid and other assets	(6)		484

Management and incentive fees payable	1,469		(231)


Interest payable	1,180		885
Accounts payable and other liabilities	(966)		(1,038)
Net cash provided by operating activities	19,001		10,352
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock	2,000		750
Redemption of common stock	(10,508)		(7,942)
Payment of offering costs	(63)		—
Dividends paid	(17,671)		(16,329)
Proceeds from Credit Facilities	74,000		66,000
Repayments on Credit Facilities	(58,000)		(141,000)
Proceeds from Series A Notes due 2026	—		72,500


Payment of deferred financing costs	(10)		(149)
Net cash used in financing activities	(10,252)		(26,170)
Net increase (decrease) in cash and cash equivalents	8,749		(15,818)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	21,312		25,813
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	30,061	$	9,995




Supplemental cash flow disclosures:
Interest paid	$	15,261	$	5,788
Taxes paid	$	1,716	$	1,562
Non-cash financing activities:
Dividends declared and unpaid	$	14,009	$	11,974
Value of shares issued pursuant to the DRIP	$	9,174	$	8,825

The accompanying notes are an integral part of these consolidated financial statements

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
Control Investments (5)
Copper Trail Fund Investments	(12) (13)	Investment Partnership
			LP Interests (CTMH, LP)	(24)	07/17/2017	38.8%								$	713	$	588

GRT Rubber Technologies LLC		Manufacturer of Engineered Rubber Products
			Secured Debt		12/21/2018		11.17%	L+	6.00%		12/21/2023	640		632		640
			Secured Debt		12/19/2014		13.17%	L+	8.00%		10/29/2026	19,944		19,779		19,944
			Member Units		12/19/2014	2,896								6,435		21,890
														26,846		42,474
Harris Preston Fund Investments	(12) (13)	Investment Partnership
			LP Interests (2717 MH, L.P.)	(8) (24)	10/01/2017	49.3%								3,364		6,346

Subtotal Control Investments (8.0% of net assets at fair value)														$	30,923	$	49,408
Affiliate Investments (6)
Analytical Systems Keco Holdings, LLC		Manufacturer of Liquid and Gas Analyzers
			Secured Debt	(9) (37)	08/16/2019			L+	10.00%		8/16/2024	$	—	$	(2)	$	(2)
			Secured Debt	(9)	08/16/2019		15.25%	L+	10.00%		8/16/2024	1,131		1,110		1,110
			Preferred Member Units		08/16/2019	800	14.13%							800		—
			Preferred Member Units		05/20/2021	607								607		1,020
			Warrants	(27)	08/16/2019	105					8/16/2029			79		—
														2,594		2,128
Barfly Ventures, LLC	(10)	Casual Restaurant Group
			Member Units		10/26/2020	12								528		1,013

Batjer TopCo, LLC		HVAC Mechanical Contractor
			Secured Debt	(37)	03/07/2022						3/7/2027	—		(1)		—
			Secured Debt		03/07/2022		10.00%				3/7/2027	1,175		1,158		1,175
			Preferred Stock	(8)	03/07/2022	453								455		680
														1,612		1,855
Brewer Crane Holdings, LLC		Provider of Crane Rental and Operating Services
			Secured Debt	(9)	01/09/2018		15.17%	L+	10.00%		1/9/2024	1,429		1,429		1,413
			Preferred Member Units	(8)	01/09/2018	737								1,070		1,590
														2,499		3,003

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)	Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
Centre Technologies Holdings, LLC	Provider of IT Hardware Services and Software Solutions
		Secured Debt	(9) (37)	01/04/2019			L+	9.00%		1/4/2026	—	—	—
		Secured Debt	(9)	01/04/2019		14.25%	L+	9.00%		1/4/2026	3,758	3,735	3,758
		Preferred Member Units		01/04/2019	3,327							1,531	2,600
												5,266	6,358
Chamberlin Holding LLC	Roofing and Waterproofing Specialty Contractor
		Secured Debt	(9) (25) (37)	02/26/2018			SF+	6.00%		2/26/2026	—	(16)	—
		Secured Debt	(9) (25)	02/26/2018		13.36%	SF+	8.00%		2/26/2026	4,102	4,099	4,102
		Member Units	(8)	02/26/2018	1,087							2,860	5,990
		Member Units	(8) (23)	11/02/2018	261,786							443	708
												7,386	10,800
Charps, LLC	Pipeline Maintenance and Construction
		Preferred Member Units	(8)	02/03/2017	457							491	3,450

Clad-Rex Steel, LLC	Specialty Manufacturer of Vinyl-Clad Metal
		Secured Debt		12/20/2016		11.50%				1/15/2024	2,430	2,430	2,409
		Secured Debt		12/20/2016		10.00%				12/20/2036	258	256	256
		Member Units	(8)	12/20/2016	179							1,820	1,600
		Member Units	(23)	12/20/2016	200							127	282
												4,633	4,547
Cody Pools, Inc.	Designer of Residential and Commercial Pools
		Secured Debt	(37)	03/06/2020						12/17/2026	—	(2)	—
		Secured Debt		03/06/2020		12.50%				12/17/2026	7,871	7,843	7,871
		Preferred Member Units	(8) (23)	03/06/2020	147							2,079	16,280
												9,920	24,151
Colonial Electric Company LLC	Provider of Electrical Contracting Services
		Secured Debt	(37)	03/31/2021						3/31/2026	—	—	—
		Secured Debt		03/31/2021		12.00%				3/31/2026	5,670	5,589	5,512
		Preferred Member Units		06/27/2023	240							240	600
		Preferred Member Units		03/31/2021	4,320							1,920	1,920
												7,749	8,032
Datacom, LLC	Technology and Telecommunications Provider
		Secured Debt		03/01/2022		7.50%				12/31/2025	80	79	79
		Secured Debt		03/31/2021		10.00%				12/31/2025	943	891	862
		Preferred Member Units	(8)	03/31/2021	1,000							290	260

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
													1,260	1,201
Digital Products Holdings LLC		Designer and Distributor of Consumer Electronics
			Secured Debt	(9) (25)	04/01/2018		15.25%	SF+	10.00%		4/27/2026	3,718	3,683	3,683
			Preferred Member Units	(8)	04/01/2018	964							2,375	2,459
													6,058	6,142
Direct Marketing Solutions, Inc.		Provider of Omni-Channel Direct Marketing Services
			Secured Debt	(37)	02/13/2018						2/13/2026	—	(4)	—
			Secured Debt		12/27/2022		13.00%				2/13/2026	5,189	5,153	5,189
			Preferred Stock	(8)	02/13/2018	2,100							2,100	5,840
													7,249	11,029
Flame King Holdings, LLC		Propane Tank and Accessories Distributor
			Preferred Equity	(8)	10/29/2021	2,340							2,600	6,090

Freeport Financial Funds	(12) (13)	Investment Partnership
			LP Interests (Freeport First Lien Loan Fund III LP)	(8) (24)	07/31/2015	6.0%							5,767	5,312

Gamber-Johnson Holdings, LLC		Manufacturer of Ruggedized Computer Mounting Systems
			Secured Debt	(9) (25) (36) (37)	06/24/2016			SF+	8.50%		1/1/2028	—	—	—
			Secured Debt	(9) (25) (36)	12/15/2022		11.00%	SF+	8.00%		1/1/2028	14,920	14,691	14,920
			Member Units	(8)	06/24/2016	2,261							4,423	17,540
													19,114	32,460
GFG Group, LLC		Grower and Distributor of a Variety of Plants and Products to Other Wholesalers, Retailers and Garden Centers
			Secured Debt		03/31/2021		9.00%				3/31/2026	2,836	2,788	2,836
			Preferred Member Units	(8)	03/31/2021	56							1,225	2,080
													4,013	4,916
Gulf Publishing Holdings, LLC		Energy Industry Focused Media and Publishing
			Secured Debt	(9) (37)	09/29/2017			L+	9.50%		7/1/2027	—	—	—
			Secured Debt		07/01/2022		12.50%				7/1/2027	600	600	571
			Preferred Equity		07/01/2022	15,930							1,400	950
			Member Units		04/29/2016	920							920	—
													2,920	1,521
Harris Preston Fund Investments	(12) (13)	Investment Partnership

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			LP Interests (HPEP 3, L.P.)	(8) (24)	08/09/2017	8.2%							2,050	4,106

IG Investor, LLC		Military and Other Tactical Gear
			Secured Debt	(37)	06/21/2023						6/21/2028	—	(30)	(30)
			Secured Debt		06/21/2023		13.00%				6/21/2028	9,426	9,148	9,148
			Common Equity		06/21/2023	3,774							3,774	3,774
													12,892	12,892
Independent Pet Partners Intermediate Holdings, LLC	(10)	Omnichannel Retailer of Specialty Pet Products
			Common Equity		04/07/2023	6,436,566							6,540	6,540

Integral Energy Services	(10)	Nuclear Power Staffing Services
			Secured Debt	(9)	08/20/2021		13.04%	L+	7.50%		8/20/2026	18,425	18,181	18,199
			Common Stock		08/20/2021	11,647							1,584	960
													19,765	19,159
Kickhaefer Manufacturing Company, LLC		Precision Metal Parts Manufacturing
			Secured Debt		10/31/2018		12.00%				10/31/2026	5,150	5,129	5,147
			Secured Debt		10/31/2018		9.00%				10/31/2048	965	956	956
			Preferred Equity		10/31/2018	145							3,060	1,930
			Member Units	(8) (23)	10/31/2018	200							248	695
													9,393	8,728
MH Corbin Holding LLC		Manufacturer and Distributor of Traffic Safety Products
			Secured Debt	(17)	08/31/2015		13.00%				12/31/2022	1,490	1,490	1,376
			Preferred Member Units		03/15/2019	16,500							1,100	—
			Preferred Member Units		09/01/2015	1,000							1,500	—
													4,090	1,376
Mystic Logistics Holdings, LLC		Logistics and Distribution Services Provider for Large Volume Mailers
			Secured Debt	(37)	08/18/2014						1/31/2024	—	—	—
			Secured Debt		08/18/2014		10.00%				1/31/2024	1,436	1,436	1,436
			Common Stock	(8)	08/18/2014	1,468							680	6,788
													2,116	8,224
NexRev LLC		Provider of Energy Efficiency Products & Services
			Secured Debt	(37)	02/28/2018						2/28/2025	—	—	—

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt		02/28/2018		10.00%				2/28/2025	2,453	2,427	2,092
			Preferred Member Units	(8)	02/28/2018	25,786,046							2,053	860
													4,480	2,952
NuStep, LLC		Designer, Manufacturer and Distributor of Fitness Equipment
			Secured Debt	(9)	01/31/2017		11.75%	L+	6.50%		1/31/2025	1,100	1,098	1,100
			Secured Debt		01/31/2017		12.00%				1/31/2025	4,610	4,606	4,606
			Preferred Member Units		01/31/2017	102							2,550	2,100
			Preferred Member Units		11/02/2022	515							515	1,290
													8,769	9,096
Oneliance, LLC		Construction Cleaning Company
			Secured Debt	(9)	08/06/2021		16.25%	L+	11.00%		8/6/2026	1,380	1,363	1,356
			Preferred Stock		08/06/2021	282							282	282
													1,645	1,638
Orttech Holdings, LLC		Distributor of Industrial Clutches, Brakes and Other Components
			Secured Debt	(9) (37)	07/30/2021			L+	11.00%		7/31/2026	—	(2)	—
			Secured Debt	(9)	07/30/2021		16.25%	L+	11.00%		7/31/2026	5,700	5,628	5,700
			Preferred Stock	(8) (23)	07/30/2021	2,500							2,500	4,140
													8,126	9,840
Robbins Bros. Jewelry, Inc.		Bridal Jewelry Retailer
			Secured Debt	(37)	12/15/2021						12/15/2026	—	(7)	(7)
			Secured Debt		12/15/2021		12.50%				12/15/2026	3,890	3,836	3,814
			Preferred Equity		12/15/2021	1,230							1,230	680
													5,059	4,487
SI East, LLC		Rigid Industrial Packaging Manufacturing
			Secured Debt	(37)	08/31/2018						6/16/2028	—	—	—
			Secured Debt		06/16/2023		12.78%				6/16/2028	18,179	18,000	18,179
			Preferred Member Units	(8)	08/31/2018	55							508	5,260
													18,508	23,439
Student Resource Center, LLC	(10)	Higher Education Services
			Secured Debt		12/31/2022		8.50%			8.50%	12/31/2027	5,793	5,300	5,300
			Preferred Equity		12/31/2022	6,564,055							—	—
													5,300	5,300
Tedder Industries, LLC		Manufacturer of Firearm Holsters and Accessories
			Secured Debt		08/31/2018		12.00%				8/31/2023	460	460	460
			Secured Debt		08/31/2018		12.00%				8/31/2023	3,800	3,799	3,783
			Preferred Member Units		08/31/2018	136							2,311	1,573

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
			Preferred Member Units		02/01/2023	888								89		133
														6,659		5,949
Trantech Radiator Topco, LLC		Transformer Cooling Products and Services
			Secured Debt	(37)	05/31/2019						5/31/2024	—		(2)		—
			Secured Debt		05/31/2019		12.00%				5/31/2024	1,980		1,967		1,980
			Common Stock	(8)	05/31/2019	154								1,164		2,940
														3,129		4,920
Volusion, LLC		Provider of Online Software-as-a-Service eCommerce Solutions
			Secured Debt		03/31/2023		10.00%				3/31/2025	900		900		900
			Preferred Member Units		01/26/2015	2,090,001								6,000		—
			Preferred Member Units		03/31/2023	2,184,683								4,906		4,600
			Preferred Member Units		03/31/2023	61,077								—		—
			Common Stock		03/31/2023	772,620								1,104		—
														12,910		5,500
VVS Holdco LLC		Omnichannel Retailer of Animal Health Products
			Secured Debt	(9) (23) (37)	12/01/2021			L+	6.00%		12/1/2023	—		(2)		(2)
			Secured Debt	(23)	12/01/2021		11.50%				12/1/2026	7,289		7,139		7,139
			Preferred Equity	(8) (23)	12/01/2021	2,960								2,960		2,960
														10,097		10,097
Subtotal Affiliate Investments (45.3% of net assets at fair value)														$	233,187	$	278,251
Non-Control/Non-Affiliate Investments (7)
AAC Holdings, Inc.	(11)	Substance Abuse Treatment Service Provider
			Secured Debt		01/31/2023		18.00%			18.00%	6/25/2025	$	136	$	134	$	128
			Secured Debt		12/11/2020		18.00%			18.00%	6/25/2025	4,569		4,401		4,317
			Common Stock		12/11/2020	593,927								3,148		—
			Warrants	(27)	12/11/2020	197,717					12/11/2025			—		—
														7,683		4,445
AB Centers Acquisition Corporation	(10)	Applied Behavior Analysis Therapy Provider
			Secured Debt	(9) (37)	09/06/2022			P+	5.00%		9/6/2028	—		(22)		(22)
			Secured Debt	(9) (25) (28) (37)	09/06/2022			SF+	6.00%		9/6/2028	—		(47)		(39)
			Secured Debt	(9) (25)	09/06/2022		11.20%	SF+	6.00%		9/6/2028	3,092		3,012		3,092
														2,943		3,031
Acumera, Inc.	(10)	Managed Security Service Provider
			Secured Debt	(9) (25) (37)	06/07/2023			SF+	7.50%		6/7/2028	—		(8)		(8)
			Secured Debt	(9) (25)	06/07/2023		12.85%	SF+	7.50%		6/7/2028	12,073		11,964		11,964

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Warrants	(40)	06/07/2023	14,953					2/15/2028		—	—
													11,956	11,956
Adams Publishing Group, LLC	(10)	Local Newspaper Operator
			Secured Debt	(9) (25) (36)	03/11/2022		10.00%	SF+	7.00%		3/11/2027	847	847	833
			Secured Debt	(9) (25) (36)	03/11/2022		10.00%	SF+	7.00%		3/11/2027	2,673	2,667	2,673
													3,514	3,506
ADS Tactical, Inc.	(11)	Value-Added Logistics and Supply Chain Provider to the Defense Industry
			Secured Debt	(9) (25)	03/29/2021		10.94%	SF+	5.75%		3/19/2026	8,875	8,768	8,470

AMEREQUIP LLC.	(10)	Full Service Provider of Comprehensive Commercial Production Services, Including the Design, Engineering, and Manufacturing of Products It
			Secured Debt	(9) (25) (37)	08/31/2022			SF+	7.40%		8/31/2027	—	—	—
			Secured Debt	(9) (25)	08/31/2022		12.70%	SF+	7.40%		8/31/2027	2,016	2,016	2,016
			Common Stock	(8)	08/31/2022	11							83	90
													2,099	2,106
American Health Staffing Group, Inc.	(10)	Healthcare Temporary Staffing
			Secured Debt	(9) (37)	11/19/2021			L+	6.00%		11/19/2026	—	(12)	(12)
			Secured Debt	(9)	11/19/2021		11.43%	L+	6.00%		11/19/2026	8,229	8,173	8,229
													8,161	8,217
American Nuts, LLC	(10)	Roaster, Mixer and Packager of Bulk Nuts and Seeds
			Secured Debt	(9) (25)	03/11/2022		11.79%	SF+	6.75%		4/10/2026	4,217	4,190	3,481
			Secured Debt	(9) (14) (25)	03/11/2022		14.79%	SF+	8.75%	1.00%	4/10/2026	4,217	4,190	3,025
													8,380	6,506
American Teleconferencing Services, Ltd.	(11)	Provider of Audio Conferencing and Video Collaboration Solutions
			Secured Debt	(14) (17)	09/17/2021		7.50%	L+	6.50%		4/7/2023	2,425	2,375	109
			Secured Debt	(9) (14) (17)	05/19/2016		7.50%	L+	6.50%		6/8/2023	11,693	11,451	526
													13,826	635
ArborWorks, LLC	(10)	Vegetation Management Services
			Secured Debt	(9) (25)	11/09/2021		15.25%	SF+	7.00%	3.00%	11/9/2026	2,617	2,567	2,018
			Secured Debt	(9) (25)	11/09/2021		15.23%	SF+	7.00%	14.40%	11/9/2026	15,821	15,593	12,196
			Common Equity		11/09/2021	124							124	—
													18,284	14,214

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
Archer Systems, LLC	(10)	Mass Tort Settlement Administration Solutions Provider
			Secured Debt	(9) (25) (37)	08/11/2022			SF+	6.00%		8/11/2027	—	(4)	(4)
			Secured Debt	(9) (25)	08/11/2022		11.39%	SF+	6.00%		8/11/2027	2,084	2,049	2,069
			Common Stock		08/11/2022	62,402							62	90
													2,107	2,155
ATS Operating, LLC	(10)	For-Profit Thrift Retailer
			Secured Debt	(9) (25)	01/18/2022		11.75%	SF+	6.50%		1/18/2027	100	100	100
			Secured Debt	(9) (25)	01/18/2022		10.65%	SF+	5.50%		1/18/2027	925	909	925
			Secured Debt	(9) (25)	01/18/2022		12.65%	SF+	7.50%		1/18/2027	925	909	925
			Common Stock		01/18/2022	100,000							100	90
													2,018	2,040
AVEX Aviation Holdings, LLC	(10)	Specialty Aircraft Dealer & MRO Provider
			Secured Debt	(9) (25)	12/23/2022		12.63%	SF+	7.25%		12/23/2027	205	186	198
			Secured Debt	(9) (25)	12/23/2022		12.65%	SF+	7.25%		12/23/2027	3,460	3,335	3,347
			Common Equity		12/15/2021	137							134	140
													3,655	3,685
BBB Tank Services, LLC		Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market
			Unsecured Debt	(9) (17)	04/08/2016		16.17%	L+	11.00%		4/8/2021	200	200	200
			Unsecured Debt	(9) (17)	04/08/2016		16.17%	L+	11.00%		4/8/2021	1,000	1,000	550
			Member Units		04/08/2016	200,000							200	—
			Preferred Stock (non-voting)		12/17/2018		15.00%						41	—
													1,441	750
Berry Aviation, Inc.	(10)	Charter Airline Services
			Preferred Member Units	(8) (23)	07/06/2018	1,548,387							—	3,940
			Preferred Member Units	(8) (23)	11/12/2019	122,416							—	310
													—	4,250
Bettercloud, Inc.	(10)	SaaS Provider of Workflow Management and Business Application Solutions
			Secured Debt	(9) (25) (37)	06/30/2022			SF+	7.00%		6/30/2028	—	(20)	(20)
			Secured Debt	(9) (25)	06/30/2022		12.26%	SF+	7.00%	6.00%	6/30/2028	8,235	8,105	8,235
													8,085	8,215
Binswanger Enterprises, LLC	(10)	Glass Repair and Installation Service Provider
			Member Units		03/10/2017	1,050,000							1,050	180

Bluestem Brands, Inc.	(11)	Multi-Channel Retailer of General Merchandise
			Secured Debt	(9)	10/19/2022		15.75%	P+	7.50%	14.75%	8/28/2025	1,524	1,524	1,432

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt	(9) (25)	08/28/2020		13.77%	SF+	8.50%	12.77%	8/28/2025	3,662	2,835	3,442
			Common Stock		10/01/2020	700,446							—	2,194
			Warrants	(27)	10/19/2022	175,110					10/19/2032		1,111	546
													5,470	7,614
Boccella Precast Products LLC		Manufacturer of Precast Hollow Core Concrete
			Secured Debt		09/23/2021		10.00%				2/28/2027	80	80	80
			Member Units		06/30/2017	540,000							564	583
													644	663
Bond Brand Loyalty ULC	(10) (13) (21)	Provider of Loyalty Marketing Services
			Secured Debt	(9) (25) (37)	05/01/2023			SF+	7.00%		5/1/2028	—	(17)	(17)
			Secured Debt	(9) (25)	05/01/2023		11.19%	SF+	6.00%		5/1/2028	4,050	3,972	3,972
			Secured Debt	(9) (25)	05/01/2023		13.19%	SF+	8.00%		5/1/2028	4,050	3,972	3,972
			Common Equity		05/01/2023	360							360	360
													8,287	8,287
Brightwood Capital Fund Investments	(12) (13)	Investment Partnership
			LP Interests (Brightwood Capital Fund III, LP)	(24)	07/21/2014	0.5%							2,449	1,529
			LP Interests (Brightwood Capital Fund IV, LP)	(8) (24)	10/26/2016	1.2%							8,737	9,178
													11,186	10,707
Buca C, LLC		Casual Restaurant Group
			Secured Debt		06/30/2015		12.00%				6/30/2023	11,490	11,490	8,095
			Preferred Member Units		06/30/2015	4	6.00%			6.00%			3,040	—
													14,530	8,095
Burning Glass Intermediate Holding Company, Inc.	(10)	Provider of Skills-Based Labor Market Analytics
			Secured Debt	(9) (25)	06/14/2021		10.20%	SF+	5.00%		6/10/2026	516	500	516
			Secured Debt	(9) (25)	06/14/2021		10.20%	SF+	5.00%		6/10/2028	13,188	13,020	13,188
													13,520	13,704
Cadence Aerospace LLC	(10)	Aerostructure Manufacturing
			Secured Debt	(9) (25) (30)	11/14/2017		13.91%	SF+	6.50%	2.00%	11/14/2024	5,046	5,040	5,046
			Secured Debt	(9) (25)	11/14/2017		13.91%	SF+	6.50%	2.00%	11/14/2024	1,585	1,583	1,585
			Secured Debt	(9) (25)	11/14/2017		13.91%	SF+	6.50%	2.00%	11/14/2024	—	—	—
			Secured Debt	(9) (25)	11/14/2017		13.91%	SF+	6.50%	2.00%	11/14/2024	—	—	—
													6,623	6,631
CAI Software LLC		Provider of Specialized Enterprise Resource Planning Software
			Preferred Equity		12/13/2021	379,338							379	379

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Preferred Equity		12/13/2021	126,446							—	—
													379	379
Camin Cargo Control, Inc.	(11)	Provider of Mission Critical Inspection, Testing and Fuel Treatment Services
			Secured Debt	(9) (25)	06/14/2021		11.72%	SF+	6.50%		6/4/2026	7,569	7,521	7,304

Career Team Holdings, LLC		Provider of Workforce Training and Career Development Services
			Secured Debt	(9)	12/17/2021		11.25%	L+	6.00%		12/17/2026	50	47	47
			Secured Debt		12/17/2021		12.50%				12/17/2026	2,250	2,203	2,203
			Common Stock		12/17/2021	50,000							500	500
													2,750	2,750
CaseWorthy, Inc.	(10)	SaaS Provider of Case Management Solutions
			Secured Debt	(9) (25) (37)	05/18/2022			SF+	6.00%		5/18/2027	—	(3)	(3)
			Secured Debt	(9) (25)	05/18/2022		11.54%	SF+	6.00%		5/18/2027	2,594	2,570	2,594
			Secured Debt	(9) (25)	05/18/2022		11.54%	SF+	6.00%		5/18/2027	1,995	1,979	1,995
			Common Equity		12/30/2022	80,000							80	80
													4,626	4,666
Channel Partners Intermediateco, LLC	(10)	Outsourced Consumer Services Provider
			Secured Debt	(9) (25) (29)	02/07/2022		11.51%	SF+	6.25%		2/7/2027	362	354	357
			Secured Debt	(9) (25) (29)	02/07/2022		11.39%	SF+	6.25%		2/7/2027	3,562	3,509	3,505
			Secured Debt	(9) (25)	03/27/2023		11.39%	SF+	6.25%		2/7/2027	452	441	445
													4,304	4,307
Clarius BIGS, LLC	(10)	Prints & Advertising Film Financing
			Secured Debt	(14) (17)	09/23/2014		15.00%			15.00%	1/5/2015	2,731	2,387	22

Classic H&G Holdings, LLC		Provider of Engineered Packaging Solutions
			Secured Debt	(9)	03/12/2020		11.25%	L+	6.00%		3/12/2025	1,140	1,130	1,140
			Secured Debt		03/12/2020		8.00%				3/12/2025	4,819	4,761	4,819
			Preferred Member Units	(8)	03/12/2020	39							1,440	4,560
													7,331	10,519
Computer Data Source, LLC	(10)	Third Party Maintenance Provider to the Data Center Ecosystem
			Secured Debt	(9) (30)	08/06/2021		12.71%	L+	7.50%		8/6/2026	4,167	4,115	3,902
			Secured Debt	(9)	08/06/2021		12.82%	L+	7.50%		8/6/2026	15,490	15,293	14,505
													19,408	18,407

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
Construction Supply Investments, LLC	(10)	Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors
			Member Units		12/29/2016	861,618							3,335	24,435

Dalton US Inc.	(10)	Provider of Supplemental Labor Services
			Secured Debt	(9) (25) (31)	08/16/2022		13.69%	SF+	8.50%		8/16/2027	261	246	261
			Secured Debt	(9) (25) (37)	08/16/2022			SF+	8.50%		8/16/2027	—	(5)	(5)
			Secured Debt	(9) (25)	08/16/2022		13.69%	SF+	8.50%		8/16/2027	1,030	1,013	1,030
			Common Stock		08/16/2022	14							14	14
													1,268	1,300
DMA Industries, LLC		Distributor of aftermarket ride control products
			Secured Debt		11/19/2021		12.00%				11/19/2026	5,000	4,928	5,000
			Preferred Equity		11/19/2021	1,486							1,486	1,816
													6,414	6,816
DTE Enterprises, LLC	(10)	Industrial Powertrain Repair and Services
			Class A Preferred Member Units		04/13/2018	776,316	8.00%			8.00%			776	260
			Class AA Preferred Member Units (non-voting)	(8)	04/13/2018		10.00%			10.00%			1,220	1,220
													1,996	1,480
Dynamic Communities, LLC	(10)	Developer of Business Events and Online Community Groups
			Secured Debt		12/20/2022						7/17/2023	1	1	1
			Secured Debt	(9) (25)	12/20/2022		9.70%	SF+	4.50%	9.70%	12/31/2026	1,957	1,798	1,798
			Secured Debt	(9) (25)	12/20/2022		11.70%	SF+	6.50%	11.70%	12/31/2026	1,972	1,739	1,739
			Preferred Equity		12/20/2022	125,000							128	128
			Preferred Equity		12/20/2022	2,376,241							—	—
			Common Equity		12/20/2022	1,250,000							—	—
													3,666	3,666
Elgin AcquireCo, LLC		Manufacturer and Distributor of Engine and Chassis Components
			Secured Debt	(9) (25) (37)	10/03/2022			SF+	6.00%		10/3/2027	—	(1)	(1)
			Secured Debt		10/03/2022		12.00%				10/3/2027	1,227	1,196	1,196
			Secured Debt		10/03/2022		9.00%				10/3/2052	414	410	410
			Common Stock		10/03/2022	19							374	390
			Common Stock	(23)	10/03/2022	61							102	109

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
													2,081	2,104
Emerald Technologies Acquisition Co, Inc.	(11)	Design & Manufacturing
			Secured Debt	(9) (25)	02/10/2022		11.66%	SF+	6.25%		2/10/2028	2,438	2,399	2,352

Engineering Research & Consulting, LLC	(10)	Provider of Engineering & Consulting Services to US Department of Defense
			Secured Debt	(9)	05/23/2022		13.75%	P+	5.50%		5/23/2027	207	194	207
			Secured Debt	(9) (25)	05/23/2022		11.76%	SF+	6.50%		5/23/2028	5,134	5,053	5,134
													5,247	5,341
EPIC Y-Grade Services, LP	(11)	NGL Transportation & Storage
			Secured Debt	(9) (25)	06/22/2018		11.36%	SF+	6.00%		6/30/2027	6,788	6,732	6,072

Escalent, Inc.	(10)	Market Research and Consulting Firm
			Secured Debt	(9) (25) (37)	04/07/2023			SF+	8.00%		4/6/2029	—	(10)	(10)
			Secured Debt	(9) (25)	04/07/2023		13.34%	SF+	8.00%		4/6/2029	6,959	6,759	6,759
			Common Equity		04/07/2023	170,998							174	174
													6,923	6,923
Event Holdco, LLC	(10)	Event and Learning Management Software for Healthcare Organizations and Systems
			Secured Debt	(9) (23) (25)	12/22/2021		12.54%	SF+	7.00%		12/22/2026	308	306	297
			Secured Debt	(9) (23) (25)	12/22/2021		12.54%	SF+	7.00%		12/22/2026	3,692	3,667	3,566
													3,973	3,863
Flip Electronics LLC	(10)	Distributor of Hard-to-Find and Obsolete Electronic Components
			Secured Debt	(25)	03/24/2022		12.55%	SF+	7.50%		1/2/2026	1,091	1,091	1,091
			Secured Debt	(25)	01/04/2021		12.69%	SF+	7.50%		1/2/2026	12,327	12,101	12,327
													13,192	13,418
Hawk Ridge Systems, LLC		Value-Added Reseller of Engineering Design and Manufacturing Solutions
			Secured Debt	(9) (25)	12/02/2016		11.53%	SF+	6.00%		1/15/2026	916	915	916
			Secured Debt		12/02/2016		12.50%				1/15/2026	9,058	9,006	9,058
			Preferred Member Units	(8)	12/02/2016	56							713	4,370
			Preferred Member Units	(23)	12/02/2016	56							38	230
													10,672	14,574
HDC/HW Intermediate Holdings	(10)	Managed Services and Hosting Provider
			Secured Debt	(9) (25)	12/21/2018		14.34%	SF+	9.50%	14.34%	12/21/2023	191	191	175
			Secured Debt	(9) (25)	12/21/2018		14.34%	SF+	9.50%	14.34%	12/21/2023	1,895	1,891	1,733
													2,082	1,908

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
HEADLANDS OP-CO LLC	(10)	Clinical Trial Sites Operator
			Secured Debt	(9) (25) (37)	08/01/2022			SF+	6.50%		8/1/2027	—	(16)	(16)
			Secured Debt	(9) (25) (37)	08/01/2022			SF+	6.50%		8/1/2027	—	(16)	(16)
			Secured Debt	(9) (25)	08/01/2022		11.60%	SF+	6.50%		8/1/2027	4,950	4,869	4,950
													4,837	4,918
Hybrid Promotions, LLC	(10)	Wholesaler of Licensed, Branded and Private Label Apparel
			Secured Debt	(9) (25)	06/30/2021		15.76%	SF+	10.25%	2.00%	6/30/2026	7,875	7,778	6,351

IG Parent Corporation	(11)	Software Engineering
			Secured Debt	(9) (25) (37)	07/30/2021			SF+	5.75%		7/30/2026	—	(15)	—
			Secured Debt	(9) (25)	07/30/2021		10.95%	SF+	5.75%		7/30/2028	8,250	8,154	8,250
													8,139	8,250
Imaging Business Machines, L.L.C.	(10)	Technology Hardware & Equipment
			Secured Debt	(9) (25)	06/08/2023		12.24%	SF+	7.00%		6/30/2028	10,436	10,084	10,084
			Common Equity		06/08/2023	422							580	580
													10,664	10,664
Implus Footcare, LLC	(10)	Provider of Footwear and Related Accessories
			Secured Debt	(9) (25)	06/01/2017		14.65%	SF+	7.75%	1.50%	7/31/2024	16,988	16,983	15,160

Industrial Services Acquisition, LLC	(10)	Industrial Cleaning Services
			Secured Debt	(9) (25)	08/13/2021		12.25%	SF+	6.75%		8/13/2026	543	521	543
			Secured Debt	(9) (25)	08/13/2021		12.25%	SF+	6.75%		8/13/2026	11,494	11,369	11,494
			Preferred Member Units	(8) (23)	01/31/2018	336	10.00%			10.00%			311	348
			Preferred Member Units	(8) (23)	05/17/2019	187	20.00%			20.00%			227	229
			Member Units	(23)	06/17/2016	2,100							2,100	1,400
													14,528	14,014
Infinity X1 Holdings, LLC		Manufacturer and Supplier of Personal Lighting Products
			Secured Debt		03/31/2023		13.00%				3/31/2028	4,500	4,416	4,416
			Preferred Equity		03/31/2023	20,000							1,000	1,000
													5,416	5,416
Infolinks Media Buyco, LLC	(10)	Exclusive Placement Provider to the Advertising Ecosystem
			Secured Debt	(9) (25)	11/01/2021		10.70%	SF+	5.50%		11/1/2026	1,890	1,830	1,830
			Secured Debt	(9) (25)	11/01/2021		10.70%	SF+	5.50%		11/1/2026	10,687	10,544	10,687

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
													12,374	12,517
Inspire Aesthetics Management, LLC	(10)	Surgical and non-surgical plastic surgery and aesthetics provider
			Secured Debt	(9) (25)	04/03/2023		13.14%	SF+	8.00%		4/3/2028	245	226	226
			Secured Debt	(9) (25)	04/03/2023		13.07%	SF+	8.00%		4/3/2028	7,535	7,346	7,346
			Common Equity		04/03/2023	90,774							288	288
													7,860	7,860
Interface Security Systems, L.L.C	(10)	Commercial Security & Alarm Services
			Secured Debt	(25)	12/09/2021		15.34%	SF+	10.00%	15.34%	8/7/2023	1,835	1,835	1,781
			Secured Debt	(9) (14) (25)	08/07/2019		12.23%	SF+	7.00%	12.23%	8/7/2023	7,334	7,254	825
			Common Stock		12/07/2021	2,143							—	—
													9,089	2,606
Intermedia Holdings, Inc.	(11)	Unified Communications as a Service
			Secured Debt	(9) (25)	08/03/2018		11.19%	SF+	6.00%		7/19/2025	5,581	5,576	4,549

Invincible Boat Company, LLC.	(10)	Manufacturer of Sport Fishing Boats
			Secured Debt	(9) (32)	08/28/2019		12.04%	L+	6.50%		8/28/2025	622	619	605
			Secured Debt	(9)	08/28/2019		12.04%	L+	6.50%		8/28/2025	16,889	16,809	16,429
													17,428	17,034
INW Manufacturing, LLC	(11)	Manufacturer of Nutrition and Wellness Products
			Secured Debt	(9) (25)	05/19/2021		11.29%	SF+	5.75%		3/25/2027	6,891	6,750	5,467

Iron-Main Investments, LLC		Consumer Reporting Agency Providing Employment Background Checks and Drug Testing
			Secured Debt		08/02/2021		13.50%				1/31/2028	1,128	1,106	1,106
			Secured Debt		09/01/2021		13.50%				1/31/2028	785	769	769
			Secured Debt		11/15/2021		13.50%				1/31/2028	2,236	2,236	2,236
			Secured Debt		11/15/2021		13.50%				1/31/2028	4,906	4,804	4,804
			Secured Debt		01/31/2023		13.50%				1/31/2028	2,791	2,654	2,654
			Common Stock		08/03/2021	50,753							689	689
													12,258	12,258
Isagenix International, LLC	(11)	Direct Marketer of Health & Wellness Products
			Secured Debt	(9) (25)	04/13/2023		12.46%	SF+	5.50%	3.00%	4/14/2028	2,305	2,050	2,074
			Common Equity		04/13/2023	186,322							—	—
													2,050	2,074
ITA Holdings Group, LLC		Air Ambulance Services
			Secured Debt	(25) (37)	06/21/2023			SF+	9.00%	2.00%	6/21/2027	—	(6)	(6)

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt	(25) (37)	06/21/2023			SF+	9.00%	2.00%	6/21/2027	—	(2)	(2)
			Secured Debt	(25)	06/21/2023		15.38%	SF+	8.00%	2.00%	6/21/2027	1,079	802	802
			Secured Debt	(25)	06/21/2023		17.38%	SF+	10.00%	2.00%	6/21/2027	1,079	802	802
			Warrants	(27)	06/21/2023	48,327					6/21/2033		523	523
													2,119	2,119
Jackmont Hospitality, Inc.	(10)	Franchisee of Casual Dining Restaurants
			Secured Debt	(9)	10/26/2022		12.69%	L+	7.50%		11/4/2024	1,302	1,276	1,302
			Secured Debt	(9)	11/08/2021		12.69%	L+	7.50%		11/4/2024	4,074	4,074	4,074
			Preferred Equity		11/08/2021	5,653,333							216	990
													5,566	6,366
Joerns Healthcare, LLC	(11)	Manufacturer and Distributor of Health Care Equipment & Supplies
			Secured Debt	(14) (25)	11/15/2021		23.35%	SF+	18.00%	23.35%	1/31/2024	2,048	2,048	1,812
			Secured Debt	(14) (25)	08/21/2019		21.48%	SF+	16.00%	21.48%	8/21/2024	3,351	3,325	233
			Common Stock		08/21/2019	392,514							3,678	—
													9,051	2,045
Johnson Downie Opco, LLC		Executive Search Services
			Secured Debt	(9) (37)	12/10/2021			L+	11.50%		12/10/2026	—	(3)	—
			Secured Debt	(9)	12/10/2021		16.75%	L+	11.50%		12/10/2026	1,093	1,078	1,093
			Preferred Equity	(8)	12/10/2021	350							350	730
													1,425	1,823
JorVet Holdings, LLC		Supplier and Distributor of Veterinary Equipment and Supplies
			Secured Debt		03/28/2022		12.00%				3/28/2027	2,850	2,808	2,808
			Preferred Equity	(8)	03/28/2022	11,934							1,193	1,193
													4,001	4,001
JTI Electrical & Mechanical, LLC	(10)	Electrical, Mechanical and Automation Services
			Secured Debt	(9) (37)	12/22/2021			L+	6.00%		12/22/2026	—	(10)	(10)
			Secured Debt	(9)	12/22/2021		11.54%	L+	6.00%		12/22/2026	3,039	2,996	3,039
			Common Equity		12/22/2021	140,351							140	220
													3,126	3,249
KMS, LLC	(10)	Wholesaler of Closeout and Value-priced Products
			Secured Debt	(9)	10/04/2021		12.81%	L+	7.25%		10/4/2026	1,303	1,234	1,192
			Secured Debt	(9)	10/04/2021		12.81%	L+	7.25%		10/4/2026	9,334	9,210	8,544
													10,444	9,736
Lightbox Holdings, L.P.	(11)	Provider of Commercial Real Estate Software
			Secured Debt	(25)	05/09/2019		10.50%	SF+	5.00%		5/9/2026	5,795	5,760	5,650

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)

LL Management, Inc.	(10)	Medical Transportation Service Provider
			Secured Debt	(9) (25)	05/02/2019		12.43%	SF+	7.25%		9/25/2023	7,982	7,976	7,982
			Secured Debt	(9) (25) (33)	05/02/2019		12.45%	SF+	7.25%		9/25/2023	6,148	6,143	6,148
			Secured Debt	(9) (25)	05/12/2022		12.44%	SF+	7.25%		9/25/2023	8,843	8,818	8,843
													22,937	22,973
LLFlex, LLC	(10)	Provider of Metal-Based Laminates
			Secured Debt	(9) (25)	08/16/2021		15.22%	SF+	9.00%	1.00%	8/16/2026	4,919	4,849	4,485

Logix Acquisition Company, LLC	(10)	Competitive Local Exchange Carrier
			Secured Debt	(9)	01/08/2018		11.48%	L+	5.75%		12/22/2024	11,563	11,161	9,251

Mako Steel, LP	(10)	Self-Storage Design & Construction
			Secured Debt	(9) (31)	03/15/2021		12.91%	L+	7.25%		3/15/2026	2,637	2,592	2,637
			Secured Debt	(9)	03/15/2021		12.91%	L+	7.25%		3/15/2026	16,874	16,685	16,874
													19,277	19,511
MB2 Dental Solutions, LLC	(11)	Dental Partnership Organization
			Secured Debt	(9) (25) (28)	01/28/2021		11.20%	SF+	6.00%		1/29/2027	10,244	10,107	10,244
			Secured Debt	(9) (25)	01/28/2021		11.20%	SF+	6.00%		1/29/2027	7,836	7,754	7,836
													17,861	18,080
MetalForming AcquireCo, LLC		Distributor of Sheet Metal Folding and Metal Forming Equipment
			Secured Debt	(37)	10/19/2022						10/19/2024	—	(1)	(1)
			Secured Debt		10/19/2022		12.75%				10/19/2027	1,748	1,702	1,702
			Preferred Equity	(8)	10/19/2022	434,331	8.00%			8.00%			450	459
			Common Stock	(8)	10/19/2022	112,865							113	100
													2,264	2,260
Microbe Formulas, LLC	(10)	Nutritional Supplements Provider
			Secured Debt	(9) (25) (37)	04/04/2022			SF+	6.25%		4/3/2028	—	(7)	(7)
			Secured Debt	(9) (25)	04/04/2022		11.44%	SF+	6.25%		4/3/2028	2,906	2,859	2,885
													2,852	2,878
Mills Fleet Farm Group, LLC	(10)	Omnichannel Retailer of Work, Farm and Lifestyle Merchandise
			Secured Debt	(9) (25)	10/24/2018		11.77%	SF+	6.50%		10/24/2024	18,740	18,587	17,856

MonitorUS Holding, LLC	(10) (13) (21)	SaaS Provider of Media Intelligence Services

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt	(9)	05/24/2022		12.54%	L+	7.00%		5/24/2027	1,109	1,092	1,090
			Secured Debt	(9)	05/24/2022		12.54%	L+	7.00%		5/24/2027	2,882	2,835	3,108
			Secured Debt	(9) (25)	05/24/2022		12.54%	SF+	7.00%		5/24/2027	4,906	4,830	4,906
			Common Stock		08/30/2022	12,798,820							256	256
													9,013	9,360
NinjaTrader, LLC	(10)	Operator of Futures Trading Platform
			Secured Debt	(9) (25) (37)	12/18/2019			SF+	6.25%		12/18/2024	—	(1)	—
			Secured Debt	(9) (25) (37)	12/18/2019			SF+	6.25%		12/18/2024	—	(17)	(17)
			Secured Debt	(9) (25)	12/18/2019		11.26%	SF+	6.00%		12/18/2024	10,991	10,912	10,991
													10,894	10,974
NTM Acquisition Corp.	(11)	Provider of B2B Travel Information Content
			Secured Debt	(9) (25)	07/12/2016		13.64%	SF+	7.25%	1.00%	6/7/2024	3,916	3,914	3,759

NWN Corporation	(10)	Value Added Reseller and Provider of Managed Services to a Diverse Set of Industries
			Secured Debt	(9) (25) (34)	05/07/2021		13.13%	SF+	8.00%		5/7/2026	1,163	1,121	1,120
			Secured Debt	(9) (25)	05/07/2021		13.19%	SF+	8.00%		5/7/2026	20,541	20,280	19,780
			Secured Debt		12/16/2022		20.00%			20.00%	8/6/2026	3,595	3,456	3,467
													24,857	24,367
Obra Capital, Inc	(11)	Alternative Asset Manager
			Secured Debt	(25)	10/10/2019		11.22%	SF+	6.00%		10/1/2026	7,390	6,988	5,580

Paragon Healthcare, Inc.	(10)	Infusion Therapy Treatment Provider
			Secured Debt	(9) (25)	01/19/2022		11.10%	SF+	5.75%		1/19/2027	29	16	29
			Secured Debt	(9) (25) (29)	01/19/2022		10.92%	SF+	5.75%		1/19/2027	425	415	425
			Secured Debt	(9) (25)	01/19/2022		10.88%	SF+	5.75%		1/19/2027	2,469	2,418	2,469
													2,849	2,923
Power System Solutions	(10)	Backup Power Generation
			Secured Debt	(9) (25) (37)	06/07/2023			SF+	6.75%		6/7/2028	—	(39)	(39)
			Secured Debt	(9) (25) (37)	06/07/2023			SF+	6.75%		6/7/2028	—	(39)	(39)
			Secured Debt	(9) (25)	06/07/2023		11.90%	SF+	6.75%		6/7/2028	7,979	7,743	7,743
			Common Equity		06/07/2023	1,234							532	532
													8,197	8,197
PrimeFlight Aviation Services	(10)	Air Freight & Logistics
			Secured Debt	(9) (25)	05/01/2023		11.94%	SF+	6.85%		5/1/2029	6,000	5,827	5,827

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
PTL US Bidco, Inc	(10) (13)	Manufacturers of Equipment, Including Drilling Rigs and Equipment, and Providers of Supplies and Services to Companies Involved In the Drilling, Evaluation and Completion of Oil and Gas Wells.
			Secured Debt	(9)	08/19/2022		14.50%	P+	6.25%		8/19/2027	156	146	156
			Secured Debt	(9) (25)	08/19/2022		12.64%	SF+	7.25%		8/19/2027	1,805	1,774	1,748
													1,920	1,904
RA Outdoors LLC	(10)	Software Solutions Provider for Outdoor Activity Management
			Secured Debt	(9) (25) (37)	04/08/2021			SF+	6.75%		4/8/2026	—	(9)	(36)
			Secured Debt	(9) (25)	04/08/2021		11.88%	SF+	6.75%		4/8/2026	12,917	12,809	11,760
													12,800	11,724
Research Now Group, Inc. and Survey Sampling International, LLC	(11)	Provider of Outsourced Online Surveying
			Secured Debt	(9) (25)	12/29/2017		10.80%	SF+	5.50%		12/20/2024	9,742	9,742	6,984

RM Bidder, LLC	(10)	Scripted and Unscripted TV and Digital Programming Provider
			Member Units		11/12/2015	1,854							31	12
			Warrants	(26)	11/12/2015	218,601					10/20/2025		284	—
													315	12
Roof Opco, LLC	(10)	Residential Re-Roofing/Repair
			Secured Debt	(9) (25) (37)	08/27/2021			SF+	6.50%		8/27/2026	—	(12)	—
			Secured Debt	(9) (25)	08/27/2021		11.65%	SF+	6.50%		8/27/2026	2,917	2,846	2,917
			Secured Debt	(9) (25) (32)	08/27/2021		12.65%	SF+	7.50%		8/27/2026	5,522	5,427	5,522
													8,261	8,439
Rug Doctor, LLC.	(10)	Carpet Cleaning Products and Machinery
			Secured Debt	(9) (25)	07/16/2021		13.43%	SF+	6.00%	2.00%	11/16/2024	6,282	6,254	5,907
			Secured Debt	(9) (25)	07/16/2021		13.43%	SF+	6.00%	2.00%	11/16/2024	9,297	9,253	8,742
													15,507	14,649
SIB Holdings, LLC	(10)	Provider of Cost Reduction Services
			Secured Debt	(9) (25)	10/29/2021		11.68%	SF+	6.25%		10/29/2026	737	728	667
			Secured Debt	(9) (25)	10/29/2021		11.68%	SF+	6.25%		10/29/2026	1,917	1,878	1,735
			Secured Debt	(9) (25)	10/29/2021		11.68%	SF+	6.25%		10/29/2026	9,542	9,412	8,625
			Common Equity		10/29/2021	119,048							250	121
													12,268	11,148
Slick Innovations, LLC		Text Message Marketing Platform
			Secured Debt		09/13/2018		14.00%				12/22/2027	3,260	3,153	3,260

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Common Stock	(8)	09/13/2018	17,500							114	480
													3,267	3,740
South Coast Terminals Holdings, LLC	(10)	Specialty Toll Chemical Manufacturer
			Secured Debt	(9) (37)	12/10/2021			L+	5.25%		12/13/2026	—	(5)	(5)
			Secured Debt	(9)	12/10/2021		10.90%	L+	5.25%		12/13/2026	2,997	2,955	2,997
			Common Equity		12/10/2021	60,606							61	85
													3,011	3,077
SPAU Holdings, LLC	(10)	Digital Photo Product Provider
			Secured Debt	(9) (25)	07/01/2022		12.96%	SF+	7.50%		7/1/2027	300	284	300
			Secured Debt	(9) (25)	07/01/2022		12.61%	SF+	7.50%		7/1/2027	4,950	4,872	4,950
			Common Stock		07/01/2022	200,000							200	170
													5,356	5,420
Tex Tech Tennis, LLC	(10)	Sporting Goods & Textiles
			Preferred Equity	(23)	07/07/2021	1,000,000							1,000	2,040

The Affiliati Network, LLC		Performance Marketing Solutions
			Secured Debt	(37)	08/09/2021						8/9/2026	—	(3)	(3)
			Secured Debt		08/09/2021		13.00%				8/9/2026	2,230	2,199	2,182
			Preferred Stock	(8)	08/09/2021	320,000							1,600	1,600
													3,796	3,779
U.S. TelePacific Corp.	(11)	Provider of Communications and Managed Services
			Secured Debt	(9) (25)	06/01/2023		6.00%	SF+	1.00%	6.00%	5/2/2027	6,918	2,855	2,871
			Secured Debt	(9) (25)	06/01/2023		6.00%	SF+	1.00%	6.00%	5/2/2027	692	15	—
													2,870	2,871
USA DeBusk LLC	(10)	Provider of Industrial Cleaning Services
			Secured Debt	(9)	10/22/2019		10.94%	L+	5.75%		9/8/2026	17,922	17,762	17,922

UserZoom Technologies, Inc.	(10)	Provider of User Experience Research Automation Software
			Secured Debt	(9) (25)	01/11/2023		12.42%	SF+	7.50%		4/5/2029	3,000	2,916	2,917

Vistar Media, Inc.	(10)	Operator of Digital Out-of-Home Advertising Platform
			Preferred Stock		04/03/2019	70,207							767	2,340

VORTEQ Coil Finishers, LLC	(10)	Specialty Coating of Aluminum and Light-Gauge Steel

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Common Equity	(8)	11/30/2021	769,231							769	2,820

Wall Street Prep, Inc.	(10)	Financial Training Services
			Secured Debt	(9) (25) (37)	07/19/2021			SF+	7.00%		7/19/2026	—	(6)	(6)
			Secured Debt	(9) (25)	07/19/2021		12.19%	SF+	7.00%		7/19/2026	4,688	4,623	4,684
			Common Stock		07/19/2021	500,000							500	530
													5,117	5,208
Watterson Brands, LLC	(10)	Facility Management Services
			Secured Debt	(9) (25) (35)	12/17/2021		11.64%	SF+	6.25%		12/17/2026	234	229	234
			Secured Debt	(9) (25)	12/17/2021		11.64%	SF+	6.25%		12/17/2026	53	46	53
			Secured Debt	(9) (25)	12/17/2021		11.64%	SF+	6.25%		12/17/2026	4,121	4,075	4,121
													4,350	4,408
West Star Aviation Acquisition, LLC	(10)	Aircraft, Aircraft Engine and Engine Parts
			Secured Debt	(9) (25) (37)	03/01/2022			SF+	6.00%		3/1/2028	—	(5)	(5)
			Secured Debt	(9) (25)	03/01/2022		10.79%	SF+	6.00%		3/1/2028	2,963	2,916	2,963
			Common Stock		03/01/2022	200,000							200	310
													3,111	3,268
Winter Services LLC	(10)	Provider of Snow Removal and Ice Management Services
			Secured Debt	(9) (25) (37)	11/19/2021			SF+	7.00%		11/19/2026	—	(38)	—
			Secured Debt	(9) (25)	11/19/2021		12.55%	SF+	7.00%		11/19/2026	2,583	2,519	2,519
			Secured Debt	(9) (25)	11/19/2021		12.17%	SF+	7.00%		11/19/2026	11,625	11,455	11,625
													13,936	14,144
World Micro Holdings, LLC		Supply Chain Management
			Secured Debt		12/12/2022		13.00%				12/12/2027	1,970	1,934	1,934
			Preferred Equity	(8)	12/12/2022	530							530	530
													2,464	2,464
Xenon Arc, Inc.	(10)	Tech-enabled Distribution Services to Chemicals and Food Ingredients Primary Producers
			Secured Debt	(25)	12/17/2021		10.41%	SF+	5.25%		12/17/2026	158	152	158
			Secured Debt	(25)	12/17/2021		10.58%	SF+	5.25%		12/17/2027	1,197	1,169	1,197
			Secured Debt	(25)	12/17/2021		10.35%	SF+	5.25%		12/17/2027	2,364	2,330	2,364
													3,651	3,719
YS Garments, LLC	(11)	Designer and Provider of Branded Activewear
			Secured Debt	(9) (25)	08/22/2018		12.59%	SF+	7.50%		8/9/2026	6,189	6,060	5,742

Zips Car Wash, LLC	(10)	Express Car Wash Operator

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)


Portfolio Company (1) (20)	Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)		Fair Value (18)
		Secured Debt	(9) (25) (33)	02/11/2022		12.50%	SF+	7.25%		3/1/2024	2,376	2,358		2,356
		Secured Debt	(9) (25) (33)	02/11/2022		12.46%	SF+	7.25%		3/1/2024	596	593		588
												2,951		2,944
Subtotal Non-Control/Non-Affiliate Investments (123.6% of net assets at fair value)												$	782,432	$	758,759
Total Portfolio Investments, June 30, 2023 (177.0% of net assets at fair value)												$	1,046,542	$	1,086,418
Money market accounts and money market funds (included in cash and cash equivalents and restricted cash and cash equivalents) (16)
Fidelity Government Portfolio Class III Fund (38)												$	10,251	$	10,251
First American Treasury Obligations Fund Class Z (39)												7,937		7,937
US Bank Money Market 5 (21)												773		773
Total money market accounts and money market funds												$	18,961	$	18,961

___________________________________________________

(1)All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C — Fair Value Hierarchy for Investments — Portfolio Composition for a description of Lower Middle Market portfolio investments. All of the Company’s investments, unless otherwise noted, are encumbered as security for one of the Company’s Credit Facilities.

(2)Debt investments are income producing, unless otherwise noted by footnote (14), as described below. Equity and warrants are non-income producing, unless otherwise noted by footnote (8), as described below.

(3)See Note C — Fair Value Hierarchy for Investments — Portfolio Composition and Schedule 12-14 for a summary of geographic location of portfolio companies.

(4)Principal is net of repayments. Cost is net of repayments and accumulated unearned income. Negative cost is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

(5)Control investments are defined by the 1940 Act as investments in which more than 25% of the voting securities are owned or where the ability to nominate greater than 50% of the board representation is maintained.

(6)Affiliate investments are defined by the 1940 Act as investments in which between 5% and 25% (inclusive) of the voting securities are owned and the investments are not classified as Control investments.

(7)Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments.

(8)Income producing through dividends or distributions.

(9)Index based floating interest rate is subject to contractual minimum interest rate. As noted in this schedule, 92% of the loans (based on the par amount) contain LIBOR or Term SOFR (“SOFR”) floors which range between 0.75% and 2.00%, with a weighted-average floor of 1.07%.

(10)Private Loan portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Private Loan portfolio investments.

(11)Middle Market portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Middle Market portfolio investments.

(12)Other Portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Other Portfolio investments.

(13)Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act. Qualifying assets must represent at least 70% of total assets at the time of acquisition of any additional non-qualifying assets.

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)

(14)Non-accrual and non-income producing investment.

(15)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.”

(16)Short-term investments represent an investment in a fund that invests in highly liquid investments with average original maturity dates of three months or less. These short-term investments are included as Cash and cash equivalents on the Consolidated Balance Sheets.

(17)Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable.

(18)Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for further discussion. Negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.

(19)Investments may have a portion, or all, of their income received from Paid-in-Kind (“PIK”) interest or dividends. PIK interest income and cumulative dividend income represent income not paid currently in cash. The difference between the Total Rate and PIK Rate represents the cash rate as of June 30, 2023.

(20)All portfolio company headquarters are based in the United States, unless otherwise noted.

(21)Effective yield as of June 30, 2023 was approximately 5.00% on the US Bank Money Market Account.

(22)Investment date represents the date of initial investment in the security position.

(23)Shares/Units represent ownership in a related Real Estate or HoldCo entity.

(24)Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated.

(25)A majority of the variable rate loans in the Company’s investment portfolio bear interest at a rate that may be determined by reference to either LIBOR (“L”), SOFR (“SF”) or an alternate base rate (commonly based on the Federal Funds Rate or the Prime rate (“P”)), which typically resets every one, three, or six months at the borrower’s option. SOFR based contracts may include a credit spread adjustment (the “Adjustment”) that is charged in addition to the stated spread. The Adjustment is applied when the SOFR rate, plus the Adjustment, exceeds the stated floor rate, as applicable. As of June 30, 2023, SOFR based contracts in the portfolio had Adjustments ranging from 0.10% to 0.26%.

(26)Warrants are presented in equivalent units with a strike price of $14.28 per unit.

(27)Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit.

(28)As of June 30, 2023, borrowings under the loan facility bear interest at SOFR+6.00% (Floor 1.00%). Each new draw of funding on the delayed draw term loan facility has a different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility, as of June 30, 2023.

(29)As of June 30, 2023, borrowings under the loan facility bear interest at SOFR+6.25% (Floor 1.00%). Each new draw or funding on the facility has a different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility, as of June 30, 2023.

(30)As of June 30, 2023, borrowings under the loan facility bore interest at LIBOR+7.50% (Floor 1.00%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of June 30, 2023.

(31)As of June 30, 2023, borrowings under the loan facility bore interest at SOFR+8.50% (Floor 1.00%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of June 30, 2023.

(32)As of June 30, 2023, borrowings under the loan facility bore interest at SOFR+6.50% (Floor 1.50%) and SOFR+8.50% (Floor 1.50%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The spread and rate presented represents a weighted-average rate for borrowings under the facility, as of June 30, 2023.

(33)As of June 30, 2023, borrowings under the loan facility bear interest at SOFR+7.25% (Floor 1.00%). Each new draw or funding on the facility has a different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility, as of June 30, 2023.

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

June 30, 2023

(dollars in thousands)

(Unaudited)

(34)As of June 30, 2023, borrowings under the loan facility bore interest at SOFR+8.00% (Floor 1.00%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of June 30, 2023.

(35)As of June 30, 2023, borrowings under the loan facility bore interest at SOFR+6.25% (Floor 1.00%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of June 30, 2023.

(36)Index based floating interest rate is subject to contractual maximum base rate of 3.00%.

(37)The position is unfunded and no interest income is being earned as of June 30, 2023. The position may earn a nominal unused facility fee on committed amounts.

(38)Effective yield as of June 30, 2023 was approximately 4.73% on the Fidelity Government Portfolio Class III Fund.

(39)Effective yield as of June 30, 2023 was approximately 4.98% on the First American Treasury Obligations Fund Class Z.

(40)Warrants are presented in equivalent shares/units with a strike price of $1.00 per share/unit.

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)		Fair Value (18)
Control Investments (5)
Copper Trail Fund Investments	(12) (13)	Investment Partnership
			LP Interests (CTMH, LP)	(24)	07/17/2017	39.0%							$	713	$	588

GRT Rubber Technologies LLC		Manufacturer of Engineered Rubber Products
			Secured Debt		12/21/2018		10.12%	L+	6.00%		12/21/2023	330	324		330
			Secured Debt		12/19/2014		12.12%	L+	8.00%		10/29/2026	19,944	19,753		19,943
			Member Units	(8)	12/19/2014	2,896							6,435		21,890
													26,512		42,163
Harris Preston Fund Investments	(12) (13)	Investment Partnership
			LP Interests (2717 MH, L.P.)	(24)	10/01/2017	49.3%							3,895		7,552

Subtotal Control Investments (8.3% of net assets at fair value)													$	31,120	$	50,303
Affiliate Investments (6)
AFG Capital Group, LLC		Provider of Rent-to-Own Financing Solutions and Services
			Preferred Member Units	(8)	11/07/2014	46							$	300	$	2,350

Analytical Systems Keco Holdings, LLC		Manufacturer of Liquid and Gas Analyzers
			Secured Debt	(9)	08/16/2019			L+	10.00%		8/16/2024	—	(2)		(2)
			Secured Debt	(9)	08/16/2019		14.13%	L+	10.00%		8/16/2024	1,166	1,135		1,135
			Preferred Member Units		08/16/2019	800	14.13%						800		—
			Preferred Member Units		05/20/2021	607							607		880
			Warrants	(27)	08/16/2019	105					8/16/2029		79		—
													2,619		2,013
ATX Networks Corp.	(11)	Provider of Radio Frequency Management Equipment
			Secured Debt	(9)	09/01/2021		12.23%	L+	7.50%		9/1/2026	6,811	6,266		6,368
			Unsecured Debt		09/01/2021		10.00%			10.00%	9/1/2028	3,417	2,337		2,614
			Common Stock		09/01/2021	585							—		3,290
													8,603		12,272
Barfly Ventures, LLC	(10)	Casual Restaurant Group
			Member Units		10/26/2020	12							528		1,107

Batjer TopCo, LLC		HVAC Mechanical Contractor
			Secured Debt		03/07/2022						3/31/2027	—	(1)		(1)
			Secured Debt		03/07/2022		11.00%				3/31/2027	1,225	1,205		1,205
			Preferred Stock	(8)	03/07/2022	453							455		455
													1,659		1,659
Brewer Crane Holdings, LLC		Provider of Crane Rental and Operating Services
			Secured Debt	(9)	01/09/2018		14.12%	L+	10.00%		1/9/2023	1,491	1,491		1,491
			Preferred Member Units	(8)	01/09/2018	737							1,070		1,770
													2,561		3,261

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)	Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
Centre Technologies Holdings, LLC	Provider of IT Hardware Services and Software Solutions
		Secured Debt	(9)	01/04/2019			L+	9.00%		1/4/2026	—	—	—
		Secured Debt	(9)	01/04/2019		13.13%	L+	9.00%		1/4/2026	3,758	3,731	3,731
		Preferred Member Units		01/04/2019	3,327							1,531	2,170
												5,262	5,901
Chamberlin Holding LLC	Roofing and Waterproofing Specialty Contractor
		Secured Debt	(9)	02/26/2018			L+	6.00%		2/26/2023	—	—	—
		Secured Debt	(9)	02/26/2018		12.13%	L+	8.00%		2/26/2023	4,236	4,228	4,236
		Member Units	(8)	02/26/2018	1,087							2,860	5,728
		Member Units	(8) (23)	11/02/2018	261,786							443	678
												7,531	10,642
Charps, LLC	Pipeline Maintenance and Construction
		Preferred Member Units	(8)	02/03/2017	457							491	3,330

Clad-Rex Steel, LLC	Specialty Manufacturer of Vinyl-Clad Metal
		Secured Debt	(9)	12/20/2016		13.23%	SF+	9.00%		1/15/2024	2,620	2,620	2,620
		Secured Debt		12/20/2016		10.00%				12/20/2036	262	260	260
		Member Units	(8)	12/20/2016	179							1,820	2,060
		Member Units	(23)	12/20/2016	200							53	152
												4,753	5,092
Cody Pools, Inc.	Designer of Residential and Commercial Pools
		Secured Debt	(9)	03/06/2020		15.38%	L+	10.50%		12/17/2026	273	261	273
		Secured Debt	(9)	03/06/2020		15.38%	L+	10.50%		12/17/2026	6,882	6,786	6,882
		Preferred Member Units	(8) (23)	03/06/2020	147							2,079	14,550
												9,126	21,705
Colonial Electric Company LLC	Provider of Electrical Contracting Services
		Secured Debt		03/31/2021						3/31/2026	—	—	—
		Secured Debt		03/31/2021		12.00%				3/31/2026	5,828	5,729	5,729
		Preferred Member Units	(8)	03/31/2021	4,320							1,920	2,290
												7,649	8,019
Datacom, LLC	Technology and Telecommunications Provider
		Secured Debt		03/01/2022		7.50%				12/31/2025	25	25	25
		Secured Debt		03/31/2021		7.50%				12/31/2025	958	895	865
		Preferred Member Units	(8)	03/31/2021	1,000							290	300
												1,210	1,190
Digital Products Holdings LLC	Designer and Distributor of Consumer Electronics
		Secured Debt	(9)	04/01/2018		14.13%	L+	10.00%		4/1/2023	3,883	3,878	3,878
		Preferred Member Units	(8)	04/01/2018	964							2,375	2,459
												6,253	6,337
Direct Marketing Solutions, Inc.	Provider of Omni-Channel Direct Marketing Services
		Secured Debt	(9)	02/13/2018			L+	11.00%		2/13/2026	—	(5)	—
		Secured Debt	(9)	12/27/2022		15.13%	L+	11.00%		2/13/2026	5,352	5,306	5,352

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Preferred Stock	(8)	02/13/2018	2,100							2,100	5,558
													7,401	10,910
Flame King Holdings, LLC		Propane Tank and Accessories Distributor
			Secured Debt	(9)	10/29/2021		10.75%	L+	6.50%		10/31/2026	1,900	1,885	1,900
			Secured Debt	(9)	10/29/2021		13.25%	L+	9.00%		10/31/2026	5,300	5,175	5,300
			Preferred Equity	(8)	10/29/2021	2,340							2,600	4,400
													9,660	11,600
Freeport Financial Funds	(12) (13)	Investment Partnership
			LP Interests (Freeport First Lien Loan Fund III LP)	(8) (24)	07/31/2015	6.0%							6,303	5,848

Gamber-Johnson Holdings, LLC		Manufacturer of Ruggedized Computer Mounting Systems
			Secured Debt	(9)	06/24/2016			SF+	8.50%		1/1/2028	—	—	—
			Secured Debt	(9)	12/15/2022		11.50%	SF+	8.50%		1/1/2028	16,020	15,747	16,020
			Member Units	(8)	06/24/2016	2,261							4,423	12,720
													20,170	28,740
GFG Group, LLC		Grower and Distributor of a Variety of Plants and Products to Other Wholesalers, Retailers and Garden Centers
			Secured Debt		03/31/2021		9.00%				3/31/2026	2,836	2,779	2,836
			Preferred Member Units	(8)	03/31/2021	56							1,225	1,790
													4,004	4,626
Gulf Publishing Holdings, LLC		Energy Industry Focused Media and Publishing
			Secured Debt	(9)	09/29/2017			L+	9.50%		7/1/2027	—	—	—
			Secured Debt		07/01/2022		12.50%				7/1/2027	600	600	571
			Preferred Equity		07/01/2022	15,930							1,400	950
			Member Units		04/29/2016	920							920	—
													2,920	1,521
Harris Preston Fund Investments	(12) (13)	Investment Partnership
			LP Interests (HPEP 3, L.P.)	(24)	08/09/2017	8.2%							2,558	4,331

Kickhaefer Manufacturing Company, LLC		Precision Metal Parts Manufacturing
			Secured Debt		10/31/2018		11.50%				10/31/2023	5,104	5,075	5,093
			Secured Debt		10/31/2018		9.00%				10/31/2048	970	961	961
			Preferred Equity		10/31/2018	145							3,060	1,800
			Member Units	(8) (23)	10/31/2018	200							248	713
													9,344	8,567
Market Force Information, LLC		Provider of Customer Experience Management Services
			Secured Debt	(14)	07/28/2017		12.00%			12.00%	7/28/2023	6,520	6,463	403
			Member Units		07/28/2017	185,980							4,160	—
													10,623	403
MH Corbin Holding LLC		Manufacturer and Distributor of Traffic Safety Products

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt		08/31/2015		13.00%				12/31/2022	1,539	1,539	1,137
			Preferred Member Units		03/15/2019	16,500							1,100	—
			Preferred Member Units		09/01/2015	1,000							1,500	—
													4,139	1,137
Mystic Logistics Holdings, LLC		Logistics and Distribution Services Provider for Large Volume Mailers
			Secured Debt		08/18/2014						1/31/2024	—	—	—
			Secured Debt		08/18/2014		10.00%				1/31/2024	1,436	1,436	1,436
			Common Stock	(8)	08/18/2014	1,468							680	5,708
													2,116	7,144
NexRev LLC		Provider of Energy Efficiency Products & Services
			Secured Debt		02/28/2018						2/28/2025	—	—	—
			Secured Debt		02/28/2018		11.00%				2/28/2025	2,866	2,828	2,119
			Preferred Member Units	(8)	02/28/2018	25,786,046							2,053	280
													4,881	2,399
NuStep, LLC		Designer, Manufacturer and Distributor of Fitness Equipment
			Secured Debt	(9)	01/31/2017		10.63%	L+	6.50%		1/31/2025	1,100	1,097	1,100
			Secured Debt		01/31/2017		12.00%				1/31/2025	4,610	4,603	4,603
			Preferred Member Units		01/31/2017	102							2,550	2,010
			Preferred Member Units		11/02/2022	515							515	1,290
													8,765	9,003
Oneliance, LLC		Construction Cleaning Company
			Secured Debt	(9)	08/06/2021		15.13%	L+	11.00%		8/6/2026	1,400	1,380	1,380
			Preferred Stock		08/06/2021	264							264	264
													1,644	1,644
Orttech Holdings, LLC		Distributor of Industrial Clutches, Brakes and Other Components
			Secured Debt	(9)	07/30/2021			L+	11.00%		7/31/2026	—	(2)	(2)
			Secured Debt	(9)	07/30/2021		15.13%	L+	11.00%		7/31/2026	5,900	5,814	5,814
			Preferred Stock	(8) (23)	07/30/2021	2,500							2,500	2,940
													8,312	8,752
Robbins Bros. Jewelry, Inc.		Bridal Jewelry Retailer
			Secured Debt	(9)	12/15/2021						12/15/2026	—	(8)	(8)
			Secured Debt	(9)	12/15/2021		12.50%				12/15/2026	3,965	3,902	3,902
			Preferred Equity		12/15/2021	1,230							1,230	1,650
													5,124	5,544
SI East, LLC		Rigid Industrial Packaging Manufacturing
			Secured Debt		08/31/2018						8/31/2023	—	—	—
			Secured Debt		08/31/2018		9.50%				8/31/2023	29,929	29,795	29,929
			Preferred Member Units	(8)	08/31/2018	52							406	4,550
													30,201	34,479
Sonic Systems International, LLC	(10)	Nuclear Power Staffing Services
			Secured Debt	(9)	08/20/2021		11.24%	L+	7.50%		8/20/2026	18,425	18,143	18,425
			Common Stock		08/20/2021	11,647							1,584	1,490
													19,727	19,915
Student Resource Center, LLC	(10)	Higher Education Services

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)		Cost (4)		Fair Value (18)
			Secured Debt		12/31/2022		13.27%	L+	8.50%		12/31/2027	5,556		5,063		5,063
			Preferred Equity		12/31/2022	6,564,055								—		—
														5,063		5,063
Tedder Industries, LLC		Manufacturer of Firearm Holsters and Accessories
			Secured Debt		08/31/2018		12.00%				8/31/2023	460		460		460
			Secured Debt		08/31/2018		12.00%				8/31/2023	3,800		3,797		3,780
			Preferred Member Units		08/31/2018	136								2,311		1,920
														6,568		6,160
Trantech Radiator Topco, LLC		Transformer Cooling Products and Services
			Secured Debt		05/31/2019						5/31/2024	—		(3)		—
			Secured Debt		05/31/2019		12.00%				5/31/2024	1,980		1,960		1,980
			Common Stock	(8)	05/31/2019	154								1,164		1,950
														3,121		3,930
VVS Holdco LLC		Omnichannel Retailer of Animal Health Products
			Secured Debt	(9) (23)	12/01/2021			L+	6.00%		12/1/2023	—		(5)		(5)
			Secured Debt	(23)	12/01/2021		11.50%				12/1/2026	7,600		7,421		7,421
			Preferred Equity	(8) (23)	12/01/2021	2,960								2,960		2,990
														10,376		10,406
Subtotal Affiliate Investments (45.4% of net assets at fair value)														$	241,565	$	277,000
Non-Control Investments (7)
AAC Holdings, Inc.	(11)	Substance Abuse Treatment Service Provider
			Secured Debt		12/11/2020		18.00%			18.00%	6/25/2025	$	4,173	$	3,963	$	4,110
			Common Stock		12/11/2020	593,927								3,148		—
			Warrants	(27)	12/11/2020	197,717					12/11/2025			—		—
														7,111		4,110
AB Centers Acquisition Corporation	(10)	Applied Behavior Analysis Therapy Provider
			Secured Debt	(9)	09/06/2022			SF+	6.00%		9/6/2028	—		(5)		(5)
			Secured Debt	(9)	09/06/2022		10.20%	SF+	6.00%		9/6/2028	86		77		86
			Secured Debt	(9)	09/06/2022		10.58%	SF+	6.00%		9/6/2028	1,983		1,930		1,983
														2,002		2,064
Acumera, Inc.	(10)	Managed Security Service Provider
			Secured Debt	(9)	06/28/2022		13.88%	L+	9.50%		10/26/2027	4,616		4,511		4,616
			Secured Debt	(9)	06/28/2022		13.57%	L+	9.00%		10/26/2027	1,379		1,348		1,379
														5,859		5,995
Adams Publishing Group, LLC	(10)	Local Newspaper Operator
			Secured Debt	(9) (28)	03/11/2022		10.00%	L+	6.00%		3/11/2027	565		565		565
			Secured Debt	(9) (28)	03/11/2022		10.00%	L+	7.50%		3/11/2027	2,826		2,819		2,826
														3,384		3,391
ADS Tactical, Inc.	(11)	Value-Added Logistics and Supply Chain Provider to the Defense Industry
			Secured Debt	(9)	03/29/2021		10.14%	L+	5.75%		3/19/2026	9,125		8,996		8,213

AMEREQUIP LLC.	(10)	Full Service Provider of Comprehensive Commercial Production Services, Including the Design, Engineering, and Manufacturing of Products It

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt	(9)	08/31/2022			SF+	7.40%		8/31/2027	—	—	—
			Secured Debt	(9)	08/31/2022		11.72%	SF+	7.40%		8/31/2027	2,026	2,026	2,025
			Common Stock		08/31/2022	11							80	80
													2,106	2,105
American Health Staffing Group, Inc.	(10)	Healthcare Temporary Staffing
			Secured Debt	(9)	11/19/2021			L+	6.00%		11/19/2026	—	(13)	(13)
			Secured Debt	(9)	11/19/2021		11.12%	L+	6.00%		11/19/2026	8,271	8,206	8,271
													8,193	8,258
American Nuts, LLC	(10)	Roaster, Mixer and Packager of Bulk Nuts and Seeds
			Secured Debt	(9)	03/11/2022		10.46%	SF+	6.75%		4/10/2026	4,438	4,416	4,148
			Secured Debt	(9)	03/11/2022		12.46%	SF+	8.75%		4/10/2026	4,438	4,417	4,161
													8,833	8,309
American Teleconferencing Services, Ltd.	(11)	Provider of Audio Conferencing and Video Collaboration Solutions
			Secured Debt	(14)	09/17/2021		7.50%	L+	6.50%		1/31/2023	2,425	2,375	136
			Secured Debt	(9) (14)	05/19/2016		7.50%	L+	6.50%		6/8/2023	11,693	11,451	658
													13,826	794
ArborWorks, LLC	(10)	Vegetation Management Services
			Secured Debt	(9)	11/09/2021		13.41%	L+	9.00%		11/9/2026	2,484	2,427	2,095
			Secured Debt	(9)	11/09/2021		13.56%	L+	9.00%		11/9/2026	15,786	15,540	13,313
			Common Equity		11/09/2021	124							124	—
													18,091	15,408
Archer Systems, LLC	(10)	Mass Tort Settlement Administration Solutions Provider
			Secured Debt	(9)	08/11/2022			SF+	6.50%		8/11/2027	—	(4)	(4)
			Secured Debt	(9)	08/11/2022		10.92%	SF+	6.50%		8/11/2027	2,205	2,165	2,170
			Common Stock		08/11/2022	62,402							62	62
													2,223	2,228
ATS Operating, LLC	(10)	For-Profit Thrift Retailer
			Secured Debt	(9)	01/18/2022			SF+	5.50%		1/18/2027	—	—	—
			Secured Debt	(9)	01/18/2022		9.32%	SF+	5.50%		1/18/2027	925	907	914
			Secured Debt	(9)	01/18/2022		11.32%	SF+	7.50%		1/18/2027	925	907	916
			Common Stock		01/18/2022	100,000							100	90
													1,914	1,920
AVEX Aviation Holdings, LLC	(10)	Specialty Aircraft Dealer
			Secured Debt	(9)	12/23/2022			SF+	7.25%		12/23/2027	—	(8)	(8)
			Secured Debt	(9)	12/23/2022		12.17%	SF+	7.25%		12/23/2027	4,038	3,876	3,876
			Common Equity		12/15/2021	50							50	56
													3,918	3,924
BBB Tank Services, LLC		Maintenance, Repair and Construction Services to the Above-Ground Storage Tank Market
			Unsecured Debt	(9) (17)	04/08/2016		15.12%	L+	11.00%		4/8/2021	200	200	200
			Unsecured Debt	(9) (17)	04/08/2016		15.12%	L+	11.00%		4/8/2021	1,000	1,000	522
			Preferred Stock (non-voting)		12/17/2018		15.00%						41	—
			Member Units		04/08/2016	200,000							200	—
													1,441	722
Berry Aviation, Inc.	(10)	Charter Airline Services

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt		07/06/2018		12.00%			1.50%	1/6/2024	190	189	190
			Preferred Member Units	(8) (23)	07/06/2018	1,548,387	8.00%			8.00%			1,161	4,561
			Preferred Member Units	(8) (23)	11/12/2019	122,416				16.00%			—	270
													1,350	5,021
Bettercloud, Inc.	(10)	SaaS Provider of Workflow Management and Business Application Solutions
			Secured Debt	(9)	06/30/2022			SF+	1.00%	6.00%	6/30/2028	—	(22)	(22)
			Secured Debt	(9)	06/30/2022		11.40%	SF+	1.00%	6.00%	6/30/2028	7,991	7,848	7,991
													7,826	7,969
Binswanger Enterprises, LLC	(10)	Glass Repair and Installation Service Provider
			Member Units		03/10/2017	1,050,000							1,050	420

Bluestem Brands, Inc.	(11)	Multi-Channel Retailer of General Merchandise
			Secured Debt	(9)	10/19/2022			L+	8.50%		8/28/2025	—	—	—
			Secured Debt	(9)	08/28/2020		12.94%	L+	8.50%		8/28/2025	3,473	2,455	3,366
			Common Stock	(8)	10/01/2020	700,446							—	4,708
			Warrants	(27)	10/19/2022	175,110					10/19/2032		1,111	1,173
													3,566	9,247
Boccella Precast Products LLC		Manufacturer of Precast Hollow Core Concrete
			Secured Debt		09/23/2021		10.00%				2/28/2027	80	80	80
			Member Units	(8)	06/30/2017	540,000							564	741
													644	821
Brightwood Capital Fund Investments	(12) (13)	Investment Partnership
			LP Interests (Brightwood Capital Fund III, LP)	(8) (24)	07/21/2014	0.5%							2,449	1,576
			LP Interests (Brightwood Capital Fund IV, LP)	(8) (24)	10/26/2016	1.2%							8,737	9,082
													11,186	10,658
Buca C, LLC		Casual Restaurant Group
			Secured Debt		06/30/2015		9.00%				6/30/2023	11,740	11,740	8,345
			Preferred Member Units		06/30/2015	4	6.00%			6.00%			3,040	—
													14,780	8,345
Burning Glass Intermediate Holding Company, Inc.	(10)	Provider of Skills-Based Labor Market Analytics
			Secured Debt	(9)	06/14/2021			L+	5.00%		6/10/2026	—	(19)	—
			Secured Debt	(9)	06/14/2021		8.91%	L+	5.00%		6/10/2028	13,255	13,070	13,255
													13,051	13,255
Cadence Aerospace LLC	(10)	Aerostructure Manufacturing
			Secured Debt	(9) (30)	11/14/2017		11.99%	L+	8.50%	0.01%	11/14/2023	20,112	20,066	20,112

CAI Software LLC		Provider of Specialized Enterprise Resource Planning Software
			Preferred Equity	(8)	12/13/2021	379,338							379	379
			Preferred Equity		12/13/2021	126,446							—	—

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
													379	379
Camin Cargo Control, Inc.	(11)	Provider of Mission Critical Inspection, Testing and Fuel Treatment Services
			Secured Debt	(9)	06/14/2021		10.88%	L+	6.50%		6/4/2026	7,609	7,553	7,342

Career Team Holdings, LLC		Provider of Workforce Training and Career Development Services
			Secured Debt	(9)	12/17/2021			L+	6.00%		12/17/2026	—	(3)	(3)
			Secured Debt		12/17/2021		12.50%				12/17/2026	2,250	2,196	2,196
			Common Stock		12/17/2021	50,000							500	500
													2,693	2,693
CaseWorthy, Inc.	(10)	SaaS Provider of Case Management Solutions
			Secured Debt	(9)	05/18/2022			L+	6.00%		5/18/2027	—	(4)	(4)
			Secured Debt	(9)	05/18/2022		10.73%	L+	6.00%		5/18/2027	2,600	2,574	2,574
			Secured Debt	(9)	05/18/2022		10.48%	L+	5.75%		5/18/2027	1,995	1,977	1,995
			Common Equity		12/30/2022	80,000							80	80
													4,627	4,645
Channel Partners Intermediateco, LLC	(10)	Outsourced Consumer Services Provider
			Secured Debt	(9) (34)	02/07/2022		10.72%	SF+	6.25%		2/7/2027	172	162	169
			Secured Debt	(9) (35)	02/07/2022		10.71%	SF+	6.25%		2/7/2027	3,591	3,530	3,539
													3,692	3,708
Clarius BIGS, LLC	(10)	Prints & Advertising Film Financing
			Secured Debt	(14) (17)	09/23/2014		15.00%			15.00%	1/5/2015	2,747	2,403	19

Classic H&G Holdings, LLC		Provider of Engineered Packaging Solutions
			Secured Debt	(9)	03/12/2020		9.75%	L+	6.00%		3/12/2025	1,140	1,127	1,140
			Secured Debt		03/12/2020		8.00%				3/12/2025	4,819	4,754	4,819
			Preferred Member Units	(8)	03/12/2020	39							1,440	6,160
													7,321	12,119
Computer Data Source, LLC	(10)	Third Party Maintenance Provider to the Data Center Ecosystem
			Secured Debt	(9) (36)	08/06/2021		12.56%	L+	8.00%		8/6/2026	4,167	4,106	3,851
			Secured Debt	(9)	08/06/2021		12.56%	L+	8.00%		8/6/2026	15,604	15,374	14,421
													19,480	18,272
Construction Supply Investments, LLC	(10)	Distribution Platform of Specialty Construction Materials to Professional Concrete and Masonry Contractors
			Member Units	(8)	12/29/2016	861,618							3,335	21,165

Dalton US Inc.	(10)	Provider of Supplemental Labor Services
			Secured Debt	(9)	08/16/2022		11.90%	SF+	8.00%		8/16/2027	79	63	78
			Secured Debt	(9)	08/16/2022			SF+	8.00%		8/16/2027	—	(5)	(5)
			Secured Debt	(9)	08/16/2022		12.56%	SF+	8.00%		8/16/2027	1,035	1,016	1,020
			Common Stock		08/16/2022	14							14	14
													1,088	1,107
DMA Industries, LLC		Distributor of aftermarket ride control products

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt		11/19/2021		12.00%				11/19/2026	5,300	5,217	5,300
			Preferred Equity		11/19/2021	1,486							1,486	1,820
													6,703	7,120
DTE Enterprises, LLC	(10)	Industrial Powertrain Repair and Services
			Secured Debt	(9)	04/13/2018			L+	7.50%		4/13/2023	—	(1)	(1)
			Secured Debt	(9)	04/13/2018		12.24%	L+	7.50%		4/13/2023	6,119	6,110	5,978
			Class A Preferred Member Units		04/13/2018	776,316	8.00%			8.00%			776	380
			Class AA Preferred Member Units (non-voting)	(8)	04/13/2018		10.00%			10.00%			1,161	1,161
													8,046	7,518
Dynamic Communities, LLC	(10)	Developer of Business Events and Online Community Groups
			Secured Debt	(9)	12/20/2022		9.18%	SF+	4.50%	9.18%	12/31/2026	1,875	1,717	1,717
			Secured Debt	(9)	12/20/2022		11.18%	SF+	6.50%	11.18%	12/31/2026	1,875	1,642	1,642
			Preferred Equity		12/20/2022	125,000							128	128
			Preferred Equity		12/20/2022	2,376,241							—	—
			Common Equity		12/20/2022	1,250,000							—	—
													3,487	3,487
Elgin AcquireCo, LLC		Manufacturer and Distributor of Engine and Chassis Components
			Secured Debt	(9)	10/03/2022			SF+	6.00%		10/3/2027	—	(1)	(1)
			Secured Debt		10/03/2022		12.00%				10/3/2027	1,227	1,192	1,192
			Secured Debt		10/03/2022		9.00%				10/3/2052	415	411	411
			Common Stock		10/03/2022	25							497	497
			Common Stock	(23)	10/03/2022	61							102	102
													2,201	2,201
Emerald Technologies Acquisition Co, Inc.	(11)	Design & Manufacturing
			Secured Debt	(9)	02/10/2022		10.67%	SF+	6.25%		2/10/2028	2,453	2,411	2,328

Engineering Research & Consulting, LLC	(10)	Provider of Engineering & Consulting Services to US Department of Defense
			Secured Debt	(9)	05/23/2022		11.68%	SF+	6.50%		5/23/2027	41	27	41
			Secured Debt	(9)	05/23/2022		10.92%	SF+	6.50%		5/23/2028	5,159	5,070	5,159
													5,097	5,200
EPIC Y-Grade Services, LP	(11)	NGL Transportation & Storage
			Secured Debt	(9)	06/22/2018		10.70%	L+	6.00%		6/30/2027	6,840	6,777	6,156

Event Holdco, LLC	(10)	Event and Learning Management Software for Healthcare Organizations and Systems
			Secured Debt	(9) (23)	12/22/2021		10.67%	L+	7.00%		12/22/2026	308	305	292
			Secured Debt	(9) (23)	12/22/2021		10.67%	L+	7.00%		12/22/2026	3,692	3,663	3,507
													3,968	3,799
Flip Electronics LLC	(10)	Distributor of Hard-to-Find and Obsolete Electronic Components
			Secured Debt	(9)	03/24/2022		11.21%	SF+	7.50%		1/2/2026	818	818	818
			Secured Debt	(9)	01/04/2021		12.19%	SF+	7.50%		1/2/2026	12,327	12,055	12,327
													12,873	13,145

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
Hawk Ridge Systems, LLC		Value-Added Reseller of Engineering Design and Manufacturing Solutions
			Secured Debt	(9)	12/02/2016		10.13%	L+	6.00%		1/15/2026	796	796	796
			Secured Debt		12/02/2016		9.00%				1/15/2026	8,200	8,147	8,200
			Preferred Member Units	(8)	12/02/2016	56							713	4,370
			Preferred Member Units	(23)	12/02/2016	56							38	230
													9,694	13,596
HDC/HW Intermediate Holdings	(10)	Managed Services and Hosting Provider
			Secured Debt	(9)	12/21/2018		14.34%	SF+	9.50%	2.00%	12/21/2023	180	179	175
			Secured Debt	(9)	12/21/2018		14.34%	SF+	9.50%	2.00%	12/21/2023	1,780	1,772	1,731
													1,951	1,906
HEADLANDS OP-CO LLC	(10)	Clinical Trial Sites Operator
			Secured Debt	(9)	08/01/2022			SF+	6.50%		8/1/2027	—	(18)	(18)
			Secured Debt	(9)	08/01/2022			SF+	6.50%		8/1/2027	—	(18)	(18)
			Secured Debt	(9)	08/01/2022		10.62%	SF+	6.50%		8/1/2027	4,975	4,884	4,975
													4,848	4,939
Hybrid Promotions, LLC	(10)	Wholesaler of Licensed, Branded and Private Label Apparel
			Secured Debt		06/30/2021		12.07%	SF+	8.25%		6/30/2026	7,875	7,762	6,826

IG Parent Corporation	(11)	Software Engineering
			Secured Debt	(9) (37)	07/30/2021		10.17%	SF+	5.75%		7/30/2026	465	447	465
			Secured Debt	(9)	07/30/2021		10.17%	SF+	5.75%		7/30/2028	8,291	8,186	8,291
													8,633	8,756
Implus Footcare, LLC	(10)	Provider of Footwear and Related Accessories
			Secured Debt	(9)	06/01/2017		13.98%	L+	7.75%	1.50%	4/30/2024	16,921	16,914	15,961

Independent Pet Partners Intermediate Holdings, LLC	(10)	Omnichannel Retailer of Specialty Pet Products
			Secured Debt	(14)	12/10/2020		6.00%			6.00%	11/20/2023	10,902	10,443	4,515
			Secured Debt		11/28/2022		14.42%	SF+	10.00%	14.42%	2/27/2023	481	459	459
			Preferred Stock (non-voting)		12/10/2020		6.00%			6.00%			2,470	—
			Preferred Stock (non-voting)		12/10/2020								—	—
			Member Units		11/20/2018	1,191,667							1,192	—
			Warrants		11/20/2018	185,757					11/19/2028		—	—
													14,564	4,974
Industrial Services Acquisition, LLC	(10)	Industrial Cleaning Services
			Secured Debt	(9)	08/13/2021		11.50%	L+	6.75%		8/13/2026	387	359	387
			Secured Debt	(9)	08/13/2021		11.50%	L+	6.75%		8/13/2026	10,871	10,738	10,871
			Preferred Member Units	(8) (23)	01/31/2018	336	10.00%			10.00%			301	338
			Preferred Member Units	(8) (23)	05/17/2019	187	20.00%			20.00%			215	217
			Member Units	(23)	06/17/2016	2,100							2,100	1,400
													13,713	13,213
Infolinks Media Buyco, LLC	(10)	Exclusive Placement Provider to the Advertising Ecosystem
			Secured Debt	(9)	11/01/2021			L+	5.50%		11/1/2026	—	(48)	(48)

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt	(9)	11/01/2021		10.23%	L+	5.50%		11/1/2026	10,742	10,576	10,742
													10,528	10,694
Interface Security Systems, L.L.C	(10)	Commercial Security & Alarm Services
			Secured Debt	(38)	12/09/2021		14.22%	L+	10.00%		8/7/2023	1,682	1,682	1,682
			Secured Debt	(9) (14)	08/07/2019		12.07%	L+	7.00%	1.00%	8/7/2023	7,334	7,254	1,085
			Common Stock		12/07/2021	2,143							—	—
													8,936	2,767
Intermedia Holdings, Inc.	(11)	Unified Communications as a Service
			Secured Debt	(9)	08/03/2018		10.38%	L+	6.00%		7/19/2025	5,621	5,613	4,342

Invincible Boat Company, LLC.	(10)	Manufacturer of Sport Fishing Boats
			Secured Debt	(9)	08/28/2019		10.14%	L+	6.50%		8/28/2025	622	618	622
			Secured Debt	(9)	08/28/2019		10.17%	L+	6.50%		8/28/2025	17,148	17,050	17,148
													17,668	17,770
INW Manufacturing, LLC	(11)	Manufacturer of Nutrition and Wellness Products
			Secured Debt	(9)	05/19/2021		10.48%	L+	5.75%		3/25/2027	6,984	6,825	5,972

Iron-Main Investments, LLC		Consumer Reporting Agency Providing Employment Background Checks and Drug Testing
			Secured Debt		08/02/2021		12.50%				11/15/2026	1,133	1,108	1,108
			Secured Debt		09/01/2021		12.50%				11/15/2026	788	771	771
			Secured Debt		11/15/2021		12.50%				11/15/2026	2,236	2,236	2,236
			Secured Debt		11/15/2021		12.50%				11/15/2026	4,928	4,813	4,813
			Common Stock		08/03/2021	44,944							449	449
													9,377	9,377
Isagenix International, LLC	(11)	Direct Marketer of Health & Wellness Products
			Secured Debt	(9) (14)	06/21/2018		9.93%	L+	7.75%		6/14/2025	5,053	5,034	1,537

Jackmont Hospitality, Inc.	(10)	Franchisee of Casual Dining Restaurants
			Secured Debt	(9)	10/26/2022		12.23%	L+	7.50%		11/4/2024	1,000	965	1,000
			Secured Debt	(9)	11/08/2021		12.23%	L+	7.50%		11/4/2024	4,126	4,126	4,126
			Preferred Equity	(8)	11/08/2021	5,653,333	12.00%			12.00%			242	1,247
													5,333	6,373
Joerns Healthcare, LLC	(11)	Manufacturer and Distributor of Health Care Equipment & Supplies
			Secured Debt		11/15/2021		18.00%				1/31/2024	1,935	1,935	1,935
			Secured Debt	(14)	08/21/2019		19.75%			19.75%	8/21/2024	3,351	3,325	418
			Common Stock		08/21/2019	392,514							3,678	—
													8,938	2,353
Johnson Downie Opco, LLC		Executive Search Services
			Secured Debt	(9)	12/10/2021			L+	11.50%		12/10/2026	—	(3)	—
			Secured Debt	(9)	12/10/2021		15.63%	L+	11.50%		12/10/2026	1,111	1,093	1,111
			Preferred Equity	(8)	12/10/2021	350							350	620
													1,440	1,731

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
JorVet Holdings, LLC		Supplier and Distributor of Veterinary Equipment and Supplies
			Secured Debt		03/28/2022		12.00%				3/28/2027	2,850	2,802	2,802
			Preferred Equity	(8)	03/28/2022	11,934							1,193	1,193
													3,995	3,995
JTI Electrical & Mechanical, LLC	(10)	Electrical, Mechanical and Automation Services
			Secured Debt	(9)	12/22/2021			L+	6.00%		12/22/2026	—	(11)	(11)
			Secured Debt	(9)	12/22/2021		10.73%	L+	6.00%		12/22/2026	3,059	3,010	3,059
			Common Equity		12/22/2021	140,351							140	240
													3,139	3,288
KMS, LLC	(10)	Wholesaler of Closeout and Value-priced Products
			Secured Debt	(9)	10/04/2021		12.00%	L+	7.25%		10/4/2026	1,330	1,250	1,244
			Secured Debt	(9)	10/04/2021		12.00%	L+	7.25%		10/4/2026	9,381	9,238	8,778
													10,488	10,022
Lightbox Holdings, L.P.	(11)	Provider of Commercial Real Estate Software
			Secured Debt		05/09/2019		9.73%	L+	5.00%		5/9/2026	5,826	5,783	5,622

LL Management, Inc.	(10)	Medical Transportation Service Provider
			Secured Debt	(9)	05/02/2019		11.21%	SF+	7.25%		9/25/2023	8,003	7,987	7,945
			Secured Debt	(9)	05/02/2019		11.67%	SF+	7.25%		9/25/2023	6,164	6,148	6,119
			Secured Debt	(9)	05/12/2022		11.67%	SF+	7.25%		9/25/2023	8,884	8,809	8,820
													22,944	22,884
LLFlex, LLC	(10)	Provider of Metal-Based Laminates
			Secured Debt	(9)	08/16/2021		12.74%	L+	9.00%		8/16/2026	4,938	4,856	4,833

Logix Acquisition Company, LLC	(10)	Competitive Local Exchange Carrier
			Secured Debt	(9)	01/08/2018		10.13%	L+	5.75%		12/22/2024	9,506	9,476	7,843

Mako Steel, LP	(10)	Self-Storage Design & Construction
			Secured Debt	(9) (31)	03/15/2021		11.79%	L+	7.25%		3/15/2026	3,448	3,395	3,426
			Secured Debt	(9)	03/15/2021		11.09%	L+	7.25%		3/15/2026	17,070	16,845	16,959
													20,240	20,385
MB2 Dental Solutions, LLC	(11)	Dental Partnership Organization
			Secured Debt	(9)	01/28/2021		10.42%	SF+	6.00%		1/29/2027	8,359	8,223	8,359
			Secured Debt	(9)	01/28/2021		10.42%	SF+	6.00%		1/29/2027	7,876	7,783	7,876
													16,006	16,235
MetalForming AcquireCo, LLC		Distributor of Sheet Metal Folding and Metal Forming Equipment
			Secured Debt		10/19/2022						10/19/2024	—	(1)	(1)
			Secured Debt		10/19/2022		12.75%				10/19/2027	1,748	1,697	1,697
			Preferred Equity	(8)	10/19/2022	434,331	8.00%			8.00%			441	441
			Common Stock		10/19/2022	112,865							113	113
													2,250	2,250
Microbe Formulas, LLC	(10)	Nutritional Supplements Provider

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt	(9)	04/04/2022			SF+	6.25%		4/3/2028	—	(7)	(7)
			Secured Debt	(9)	04/04/2022		9.86%	SF+	6.25%		4/3/2028	3,142	3,085	3,034
													3,078	3,027
Mills Fleet Farm Group, LLC	(10)	Omnichannel Retailer of Work, Farm and Lifestyle Merchandise
			Secured Debt	(9)	10/24/2018		10.66%	L+	6.25%		10/24/2024	18,769	18,559	18,338

MonitorUS Holding, LLC	(10) (13) (21)	SaaS Provider of Media Intelligence Services
			Secured Debt	(9)	05/24/2022			L+	7.00%		5/24/2027	—	(19)	(19)
			Secured Debt	(9)	05/24/2022		11.73%	L+	7.00%		5/24/2027	2,882	2,828	3,139
			Secured Debt	(9)	05/24/2022		11.73%	L+	7.00%		5/24/2027	4,906	4,820	4,906
			Common Stock		08/30/2022	12,798,820							256	256
													7,885	8,282
NinjaTrader, LLC	(10)	Operator of Futures Trading Platform
			Secured Debt	(9)	12/18/2019			L+	6.25%		12/18/2024	—	(1)	—
			Secured Debt	(9)	12/18/2019			L+	6.25%		12/18/2024	—	(23)	(23)
			Secured Debt	(9)	12/18/2019		9.99%	L+	6.25%		12/18/2024	11,634	11,524	11,634
													11,500	11,611
NTM Acquisition Corp.	(11)	Provider of B2B Travel Information Content
			Secured Debt	(9)	07/12/2016		9.50%	L+	6.25%	1.00%	6/7/2024	4,036	4,034	3,915

NWN Corporation	(10)	Value Added Reseller and Provider of Managed Services to a Diverse Set of Industries
			Secured Debt	(9) (39)	05/07/2021		10.85%	SF+	8.00%		5/7/2026	1,570	1,519	1,482
			Secured Debt	(9)	05/07/2021		12.56%	SF+	8.00%		5/7/2026	20,786	20,476	19,620
			Secured Debt		12/16/2022		20.00%			20.00%	8/6/2026	3,226	3,065	3,065
													25,060	24,167
OVG Business Services, LLC	(10)	Venue Management Services
			Secured Debt	(9)	11/29/2021		10.64%	L+	6.25%		11/19/2028	17,413	17,265	16,368

Paragon Healthcare, Inc.	(10)	Infusion Therapy Treatment Provider
			Secured Debt	(9)	01/19/2022		10.26%	SF+	5.75%		1/19/2027	71	57	70
			Secured Debt	(9) (29)	01/19/2022		9.96%	SF+	5.75%		1/19/2027	356	343	349
			Secured Debt	(9)	01/19/2022		9.81%	SF+	5.75%		1/19/2027	2,363	2,304	2,317
													2,704	2,736
PTL US Bidco, Inc	(13)	Manufacturers of Equipment, Including Drilling Rigs and Equipment, and Providers of Supplies and Services to Companies Involved In the Drilling, Evaluation and Completion of Oil and Gas Wells.
			Secured Debt	(9)	08/19/2022			SF+	7.25%		8/19/2027	—	(12)	(12)
			Secured Debt	(9)	08/19/2022		11.80%	SF+	7.25%		8/19/2027	1,852	1,817	1,828
													1,805	1,816
RA Outdoors LLC	(10)	Software Solutions Provider for Outdoor Activity Management
			Secured Debt	(9)	04/08/2021			SF+	6.75%		4/8/2026	—	(11)	(11)

Table of contents

MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
			Secured Debt	(9)	04/08/2021		10.56%	SF+	6.75%		4/8/2026	12,917	12,789	11,685
													12,778	11,674
Research Now Group, Inc. and Survey Sampling International, LLC	(11)	Provider of Outsourced Online Surveying
			Secured Debt	(9)	12/29/2017		8.84%	L+	5.50%		12/20/2024	9,820	9,820	7,434

RM Bidder, LLC	(10)	Scripted and Unscripted TV and Digital Programming Provider
			Member Units		11/12/2015	1,854							31	13
			Warrants	(26)	11/12/2015	218,601					10/20/2025		284	—
													315	13
Roof Opco, LLC	(10)	Residential Re-Roofing/Repair
			Secured Debt	(9)	08/27/2021		10.97%	SF+	6.50%		8/27/2026	389	375	389
			Secured Debt	(9)	08/27/2021		10.32%	SF+	6.50%		8/27/2026	2,917	2,835	2,917
			Secured Debt	(9)	08/27/2021		10.32%	SF+	6.50%		8/27/2026	3,967	3,906	3,967
													7,116	7,273
Rug Doctor, LLC.	(10)	Carpet Cleaning Products and Machinery
			Secured Debt	(9)	07/16/2021		13.02%	SF+	6.25%	2.00%	11/16/2024	6,250	6,212	5,597
			Secured Debt	(9)	07/16/2021		13.02%	SF+	6.25%	2.00%	11/16/2024	9,250	9,190	8,293
													15,402	13,890
Savers, Inc.	(11)	For-Profit Thrift Retailer
			Secured Debt	(9)	05/14/2021		10.34%	SF+	5.50%		4/26/2028	4,281	4,270	4,149

SIB Holdings, LLC	(10)	Provider of Cost Reduction Services
			Secured Debt	(9)	10/29/2021		11.01%	L+	6.25%		10/29/2026	522	511	491
			Secured Debt	(9)	10/29/2021		11.01%	L+	6.25%		10/29/2026	1,954	1,908	1,803
			Secured Debt	(9)	10/29/2021		11.01%	L+	6.25%		10/29/2026	9,726	9,576	8,974
			Common Equity		10/29/2021	119,048							250	183
													12,245	11,451
Slick Innovations, LLC		Text Message Marketing Platform
			Secured Debt		09/13/2018		14.00%				12/22/2027	3,460	3,334	3,460
			Common Stock	(8)	09/13/2018	17,500							114	400
													3,448	3,860
South Coast Terminals Holdings, LLC	(10)	Specialty Toll Chemical Manufacturer
			Secured Debt	(9)	12/10/2021			L+	5.75%		12/13/2026	—	(6)	(6)
			Secured Debt	(9)	12/10/2021		9.69%	L+	5.75%		12/13/2026	3,523	3,467	3,523
			Common Equity		12/10/2021	60,606							61	92
													3,522	3,609
SPAU Holdings, LLC	(10)	Digital Photo Product Provider
			Secured Debt	(9)	07/01/2022			SF+	7.50%		7/1/2027	—	(18)	(18)
			Secured Debt	(9)	07/01/2022		11.06%	SF+	7.50%		7/1/2027	4,975	4,887	4,975
			Common Stock		07/01/2022	200,000							200	200
													5,069	5,157
Tex Tech Tennis, LLC	(10)	Sporting Goods & Textiles
			Preferred Equity	(23)	07/07/2021	1,000,000							1,000	1,830

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)	Fair Value (18)
The Affiliati Network, LLC		Performance Marketing Solutions
			Secured Debt		08/09/2021		13.00%				8/9/2026	30	26	26
			Secured Debt		08/09/2021		13.00%				8/9/2026	2,380	2,341	2,341
			Preferred Stock	(8)	08/09/2021	320,000							1,600	1,600
													3,967	3,967
U.S. TelePacific Corp.	(11)	Provider of Communications and Managed Services
			Secured Debt	(9)	05/17/2017		11.57%	SF+	1.25%	7.25%	5/2/2026	13,425	13,358	5,018

USA DeBusk LLC	(10)	Provider of Industrial Cleaning Services
			Secured Debt	(9)	10/22/2019		9.82%	L+	5.75%		9/8/2026	18,013	17,828	18,013

Vida Capital, Inc	(11)	Alternative Asset Manager
			Secured Debt		10/10/2019		10.38%	L+	6.00%		10/1/2026	6,263	6,208	4,885

Vistar Media, Inc.	(10)	Operator of Digital Out-of-Home Advertising Platform
			Preferred Stock		04/03/2019	70,207							767	2,250

Volusion, LLC		Provider of Online Software-as-a-Service eCommerce Solutions
			Secured Debt	(17)	01/26/2015		11.50%				1/26/2020	7,172	7,172	6,392
			Unsecured Convertible Debt		05/16/2018		8.00%				11/16/2023	175	175	—
			Preferred Member Units		01/26/2015	2,090,001							6,000	—
			Warrants	(27)	01/26/2015	784,867					1/26/2025		1,104	—
													14,451	6,392
VORTEQ Coil Finishers, LLC	(10)	Specialty Coating of Aluminum and Light-Gauge Steel
			Common Equity	(8)	11/30/2021	769,231							769	2,910

Wall Street Prep, Inc.	(10)	Financial Training Services
			Secured Debt	(9)	07/19/2021			L+	7.00%		7/19/2026	—	(7)	(7)
			Secured Debt	(9)	07/19/2021		10.74%	L+	7.00%		7/19/2026	5,328	5,252	5,216
			Common Stock		07/19/2021	500,000							500	530
													5,745	5,739
Watterson Brands, LLC	(10)	Facility Management Services
			Secured Debt	(9)	12/17/2021		10.73%	L+	6.00%		12/17/2026	51	46	51
			Secured Debt	(9)	12/17/2021		10.73%	L+	6.00%		12/17/2026	53	45	53
			Secured Debt	(9)	12/17/2021		10.73%	L+	6.00%		12/17/2026	4,142	4,089	4,141
													4,180	4,245
West Star Aviation Acquisition, LLC	(10)	Aircraft, Aircraft Engine and Engine Parts
			Secured Debt	(9)	03/01/2022			SF+	6.00%		3/1/2028	—	(6)	(6)
			Secured Debt	(9)	03/01/2022		8.59%	SF+	6.00%		3/1/2028	2,978	2,926	2,948
			Common Stock		03/01/2022	200,000							200	250
													3,120	3,192

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)


Portfolio Company (1) (20)		Business Description	Type of Investment (2) (3) (15)		Investment Date (22)	Shares/Units	Total Rate	Reference Rate and Spread (25)		PIK Rate (19)	Maturity Date	Principal (4)	Cost (4)		Fair Value (18)
Winter Services LLC	(10)	Provider of Snow Removal and Ice Management Services
			Secured Debt	(9)	11/19/2021			L+	7.00%		11/19/2026	—	(43)		—
			Secured Debt	(9)	11/19/2021			L+	7.00%		11/19/2026	—	(43)		(43)
			Secured Debt	(9)	11/19/2021		10.74%	L+	7.00%		11/19/2026	12,500	12,305		12,487
													12,219		12,444
World Micro Holdings, LLC		Supply Chain Management
			Secured Debt		12/12/2022		13.00%				12/12/2027	1,970	1,930		1,930
			Preferred Equity		12/12/2022	530							530		530
													2,460		2,460
Xenon Arc, Inc.	(10)	Tech-enabled Distribution Services to Chemicals and Food Ingredients Primary Producers
			Secured Debt		12/17/2021			L+	5.25%		12/17/2026	—	(6)		(6)
			Secured Debt		12/17/2021		10.84%	L+	5.25%		12/17/2027	1,200	1,169		1,192
			Secured Debt		12/17/2021		8.63%	L+	5.25%		12/17/2027	2,370	2,332		2,354
													3,495		3,540
YS Garments, LLC	(11)	Designer and Provider of Branded Activewear
			Secured Debt	(9)	08/22/2018		9.51%	L+	5.50%		8/9/2024	6,329	6,310		6,064

Zips Car Wash, LLC	(10)	Express Car Wash Operator
			Secured Debt	(9)	02/11/2022		11.67%	SF+	7.25%		3/1/2024	2,388	2,357		2,388
			Secured Debt	(9) (32)	02/11/2022		11.67%	SF+	7.25%		3/1/2024	599	594		597
													2,951		2,985
Subtotal Non-Control/Non-Affiliate Investments (121.5% of net assets at fair value)													$	787,201	$	740,840
Total Portfolio Investments, December 31, 2022 (175.2% of net assets at fair value)													$	1,059,886	$	1,068,143
Short-Term Investments (16)

US Bank Money Market Account (21)													$	8,347	$	8,347
Total Short-Term Investments													$	8,347	$	8,347

___________________________________________________

(1)All investments are Lower Middle Market portfolio investments, unless otherwise noted. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Lower Middle Market portfolio investments. All of the Company’s investments, unless otherwise noted, are encumbered as security for one of the Company’s Credit Facilities.

(3)See Note C — Fair Value Hierarchy for Investments — Portfolio Composition and Schedule 12-14 for a summary of geographic location of portfolio companies.

(4)Principal is net of repayments. Cost is net of repayments and accumulated unearned income.

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)

(7)Non-Control/Non-Affiliate investments are defined by the 1940 Act as investments that are neither Control investments nor Affiliate investments.

(8)Income producing through dividends or distributions.

(9)Index based floating interest rate is subject to contractual minimum interest rate. As noted in this schedule, 93% of the loans (based on the par amount) contain LIBOR floors which range between 0.50% and 2.00%, with a weighted-average LIBOR floor of 1.04%.

(10)Private Loan portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Private Loan portfolio investments.

(11)Middle Market portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Middle Market portfolio investments.

(12)Other Portfolio investment. See Note C—Fair Value Hierarchy for Investments—Portfolio Composition for a description of Other Portfolio investments.

(14)Non-accrual and non-income producing investment.

(15)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities.”

(17)Maturity date is under on-going negotiations with the portfolio company and other lenders, if applicable.

(18)Investment fair value was determined using significant unobservable inputs, unless otherwise noted. See Note C — Fair Value Hierarchy for Investments—Portfolio Composition for further discussion. Negative fair value is the result of the capitalized discount on the loan or the unfunded commitment being valued below par.

(19)Investments may have a portion, or all, of their income received from Paid-in-Kind ("PIK") interest or dividends. PIK interest income and cumulative dividend income represent income not paid currently in cash. The difference between the Total Rate and PIK Rate represents the cash rate as of December 31, 2022.

(20)All portfolio company headquarters are based in the United States, unless otherwise noted.

(21)Effective yield as of December 31, 2022 was approximately 0.005% on the US Bank Money Market Account.

(22)Investment date represents the date of initial investment in the security position.

(23)Shares/Units represent ownership in a related Real Estate or HoldCo entity.

(24)Investment is not unitized. Presentation is made in percent of fully diluted ownership unless otherwise indicated.

(25)A majority of the variable rate loans in the Company’s Investment Portfolio bear interest at a rate that may be determined by reference to either LIBOR (“L”), SOFR (“SF”) or an alternate Base rate (commonly based on the Federal Funds Rate or the Prime rate (“P”)), which typically resets every one, three, or six months at the borrower’s option. SOFR based contracts may include a credit spread adjustment (the “Adjustment”) that is charged in addition to the stated spread. The Adjustment is applied when the SOFR rate, plus the Adjustment, exceeds the stated floor rate, as applicable. As of December 31, 2022, SOFR based contracts in the portfolio had Adjustments ranging from 0.10% to 0.26%.

(26)Warrants are presented in equivalent units with a strike price of $14.28 per unit.

(27)Warrants are presented in equivalent shares/units with a strike price of $0.01 per share/unit.

(28)Index based floating interest rate is subject to contractual maximum base rate of 2.50%.

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MSC INCOME FUND, INC.

Consolidated Schedule of Investments (Continued)

December 31, 2022

(dollars in thousands)

(29)As of December 31, 2022, borrowings under the loan facility bore interest at SOFR+5.75% (Floor 1.00%). Delayed draw term loan facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2022.

(30)The security has an effective contractual interest rate of 2.00% PIK + LIBOR+6.50%, Floor 1.00%,but the issuer may, in its discretion, elect to pay the PIK interest in cash. The rate presented represents the effective current yield based on actual payments received during the period.

(31)As of December 31, 2022, borrowings under the loan facility bore interest at LIBOR+7.25% (Floor 0.75%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2022.

(32)As of December 31, 2022, borrowings under the loan facility bore interest at SOFR+7.25% (Floor 1.00%). Each new draw on the delayed draw term loan facility has a different floating rate reset date. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2022.

(33)The position is unfunded and no interest income is being earned as of December 31, 2022. The position may earn a nominal unused facility fee on committed amounts.

(34)As of December 31, 2022, borrowings under the loan facility bore interest at SOFR+6.25% (Floor 1.00%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2022.

(35)As of December 31, 2022, borrowings under the loan facility bore interest at SOFR+6.25% (Floor 1.00%). Due to an amendment and subsequent funding during the quarter, the term loan facility has different floating rate reset dates. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2022.

(36)As of December 31, 2022, borrowings under the loan facility bore interest at LIBOR+8.00% (Floor 1.00%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2022.

(37)As of December 31, 2022, borrowings under the loan facility bore interest at SOFR+5.75% (Floor 1.00%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2022.

(38)As of December 31, 2022, borrowings under the loan facility bore interest at LIBOR+10.00%. RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2022.

(39)As of December 31, 2022, borrowings under the loan facility bore interest at SOFR+ 8.00% (Floor 1.00%). RLOC facility permits the borrower to make an interest rate election regarding the base rate on each draw under the facility. The rate presented represents a weighted-average rate for borrowings under the facility, as of December 31, 2022.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE A — ORGANIZATION AND BASIS OF PRESENTATION

1.Organization

MSC Income Fund, Inc. (“MSIF” or, together with its consolidated subsidiaries, “MSC Income Fund” or the “Company”) is a principal investment firm primarily focused on providing debt capital to middle market (“Middle Market”) companies and customized debt and equity financing to lower middle market (“LMM”) companies. The portfolio investments of MSC Income Fund are typically made to support leveraged buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in a variety of industry sectors. MSC Income Fund seeks to partner with private equity funds in its Private Loan (as defined below) and Middle Market investment strategies. MSC Income Fund invests primarily in secured debt investments of Middle Market companies generally headquartered in the United States and in secured debt investments, equity investments, warrants and other securities of LMM companies based in the United States. MSC Income Fund seeks to partner with entrepreneurs, business owners and management teams and generally provides “one-stop” financing alternatives within its LMM investment strategy.

MSIF was formed in November 2011 to operate as an externally managed business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”). MSIF has elected to be treated for U.S. federal income tax purposes as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, MSIF generally does not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that it distributes to its stockholders.

On October 28, 2020, MSIF’s stockholders approved the appointment of MSC Adviser I, LLC (the “Adviser”), which is wholly-owned by Main Street Capital Corporation (“Main Street”), a New York Stock Exchange listed BDC, as MSIF’s investment adviser and administrator, under an Investment Advisory and Administrative Services Agreement dated October 30, 2020 (the “Investment Advisory Agreement”). In such role, the Adviser has the responsibility to manage the business of MSC Income Fund, including the responsibility to identify, evaluate, negotiate and structure prospective investments, make investment and portfolio management decisions, monitor MSC Income Fund’s investment portfolio and provide ongoing administrative services.

MSIF has certain direct and indirect wholly-owned subsidiaries that have elected to be taxable entities (the “Taxable Subsidiaries”). The primary purpose of the Taxable Subsidiaries is to permit MSIF to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes. MSIF also has certain direct and indirect wholly-owned subsidiaries formed for financing purposes (the “Structured Subsidiaries”).

Unless otherwise noted or the context otherwise indicates, the terms “we,” “us,” “our,” the “Company” and “MSC Income Fund” refer to MSIF and its consolidated subsidiaries, which include the Taxable Subsidiaries and the Structured Subsidiaries.

2.Basis of Presentation

MSC Income Fund’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The Company is an investment company following accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 946, Financial Services—Investment Companies (“ASC 946”). For each of the periods presented herein, MSC Income Fund’s consolidated financial statements include the accounts of MSIF and its consolidated subsidiaries. The Investment Portfolio, as used herein, refers to all of MSC Income Fund’s investments in Private Loan portfolio companies, investments in LMM portfolio companies, investments in Middle Market portfolio companies and Other Portfolio investments (see Note C — Fair Value Hierarchy for Investments — Portfolio Composition — Investment Portfolio Composition for additional discussion of MSC Income Fund’s Investment Portfolio and definitions for the defined terms Private Loan and Other Portfolio). MSC Income Fund’s results of operations for the three and six months ended June 30, 2023 and 2022, cash flows for the six months ended June 30, 2023 and 2022, and financial position as of June 30, 2023 and December 31, 2022, are presented on a consolidated basis. The effects of all intercompany transactions between MSIF and its consolidated subsidiaries have been eliminated in consolidation.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

The accompanying unaudited consolidated financial statements of MSC Income Fund are presented in conformity with U.S. GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Articles 6, 10 and 12 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. The unaudited consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2022. In the opinion of management, the unaudited consolidated financial results included herein contain all adjustments, consisting solely of normal recurring accruals, considered necessary for the fair presentation of financial statements for the interim periods included herein. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results to be expected for the full year. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Principles of Consolidation

Under ASC 946, MSC Income Fund is precluded from consolidating other entities in which MSC Income Fund has equity investments, including those in which it has a controlling interest, unless the other entity is another investment company. An exception to this general principle in ASC 946 occurs if MSC Income Fund holds a controlling interest in an operating company that provides all or substantially all of its services directly to MSC Income Fund. Accordingly, as noted above, MSC Income Fund’s consolidated financial statements include the financial position and operating results for the Taxable Subsidiaries and the Structured Subsidiaries. MSC Income Fund has determined that none of its portfolio investments qualify for this exception. Therefore, MSC Income Fund’s Investment Portfolio is carried on the Consolidated Balance Sheets at fair value, as discussed further in Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio, with any adjustments to fair value recognized as “Net Unrealized Appreciation (Depreciation)” until the investment is realized, usually upon exit, resulting in any gain or loss being recognized as a “Net Realized Gain (Loss),” in both cases on the Consolidated Statements of Operations.

Portfolio Investment Classification

MSC Income Fund classifies its Investment Portfolio in accordance with the requirements of the 1940 Act. Under the 1940 Act, (a) “Control Investments” are defined as investments in which MSC Income Fund owns more than 25% of the voting securities or has rights to maintain greater than 50% of the board representation, (b) “Affiliate Investments” are defined as investments in which MSC Income Fund owns between 5% and 25% (inclusive) of the voting securities and does not have rights to maintain greater than 50% of the board representation and (c) “Non-Control/Non-Affiliate Investments” are defined as investments that are neither Control Investments nor Affiliate Investments. For purposes of determining the classification of its Investment Portfolio, MSC Income Fund has excluded consideration of any voting securities or board appointment rights held by Main Street and third-party investment funds advised by the Adviser.

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.Valuation of the Investment Portfolio

MSC Income Fund accounts for its Investment Portfolio at fair value. As a result, MSC Income Fund follows the provisions of ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires MSC Income Fund to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact.

MSC Income Fund’s portfolio strategy calls for it to invest primarily in debt securities issued by Middle Market companies and illiquid debt and equity securities issued by privately held, LMM companies. The Middle Market companies in which MSC Income Fund invests are generally larger in size than the LMM companies and their debt securities can be more liquid than the debt securities issued by LMM companies. MSC Income Fund categorizes some of

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

its investments in Middle Market companies and LMM companies as Private Loan portfolio investments, which are primarily debt securities in privately held companies that have primarily been originated directly by our Adviser or, to a lesser extent, by the Adviser through its strategic relationships with other investment funds on a collaborative basis through investments that are often referred to in the debt markets as “club deals” because of the small lender group size. In both cases, MSC Income Fund’s Private Loan investments are typically made to support a company owned by or in the process of being acquired by a private equity sponsor. Private Loan investments are made in companies that are consistent with the size of companies MSC Income Fund invests in through its Middle Market portfolio and LMM portfolio. MSC Income Fund’s portfolio also includes Other Portfolio investments which primarily consist of investments that are not consistent with the typical profiles for its Private Loan, LMM or Middle Market portfolio investments, including investments which may be managed by third parties. MSC Income Fund’s portfolio investments may be subject to restrictions on resale.

LMM investments and Other Portfolio investments generally have no established trading market, while Private Loan investments may include investments which have no established market or have established markets that are not active. Middle Market portfolio investments generally have established markets that are not active. MSC Income Fund determines in good faith the fair value of its Investment Portfolio pursuant to a valuation policy in accordance with ASC 820, with such valuation process approved by its Board of Directors and in accordance with the 1940 Act. MSC Income Fund’s valuation policies and processes are intended to provide a consistent basis for determining the fair value of MSC Income Fund’s Investment Portfolio.

For Private Loan and Middle Market portfolio investments in debt securities for which it has determined that third-party quotes or other independent pricing are not available or appropriate, MSC Income Fund generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value the investment in a current hypothetical sale using the yield-to-maturity model (“Yield-to-Maturity”) valuation method. For LMM portfolio investments, MSC Income Fund generally reviews external events, including private mergers, sales and acquisitions involving comparable companies, and includes these events in the valuation process by using an enterprise value waterfall methodology (“Waterfall”) for its LMM equity investments and an income approach using a Yield-to-Maturity valuation method for its LMM debt investments. For Middle Market portfolio investments in debt securities for which it has determined that third-party quotes or other independent prices are available, MSC Income Fund primarily uses quoted prices in the valuation process. MSC Income Fund determines the appropriateness of the use of third-party broker quotes, if any, in determining fair value based on its understanding of the level of actual transactions used by the broker to develop the quote and whether the quote was an indicative price or binding offer, the depth and consistency of broker quotes and the correlation of changes in broker quotes with underlying performance of the portfolio company and other market indices. For its Other Portfolio equity investments, MSC Income Fund generally calculates the fair value of the investment primarily based on the net asset value (“NAV”) of the fund and adjusts the fair value for other factors deemed relevant that would affect the fair value of the investment. All of the valuation approaches for MSC Income Fund’s portfolio investments estimate the value of the investment as if MSC Income Fund was to sell, or exit, the investment as of the measurement date.

These valuation approaches consider the value associated with MSC Income Fund’s ability to control the capital structure of the portfolio company, as well as the timing of a potential exit. For valuation purposes, “control” portfolio investments are composed of debt and equity securities in companies for which MSC Income Fund has a controlling interest in the equity ownership of the portfolio company or the ability to nominate a majority of the portfolio company’s board of directors. For valuation purposes, “non-control” portfolio investments are generally composed of debt and equity securities in companies for which MSC Income Fund does not have a controlling interest in the equity ownership of the portfolio company or the ability to nominate a majority of the portfolio company’s board of directors.

Under the Waterfall valuation method, MSC Income Fund estimates the enterprise value of a portfolio company using a combination of market and income approaches or other appropriate valuation methods, such as considering recent transactions in the equity securities of the portfolio company or third-party valuations of the portfolio company, and then performs a Waterfall calculation by allocating the enterprise value over the portfolio company’s securities in order of their preference relative to one another. The enterprise value is the fair value at which an enterprise could be sold in a transaction between two willing parties, other than through a forced or liquidation sale. Typically, privately held companies are bought and sold based on multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), cash flows, net income, revenues, or in limited cases, book value. There is no single methodology for estimating enterprise value. For any

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

one portfolio company, enterprise value is generally described as a range of values from which a single estimate of enterprise value is derived. In estimating the enterprise value of a portfolio company, MSC Income Fund analyzes various factors including the portfolio company’s historical and projected financial results. Due to SEC deadlines for MSC Income Fund’s quarterly and annual financial reporting, the operating results of a portfolio company used in the current period valuation are generally the results from the period ended three months prior to such valuation date and may include unaudited, projected, budgeted or pro forma financial information and may require adjustments for non-recurring items or to normalize the operating results that may require significant judgment in determining. In addition, projecting future financial results requires significant judgment regarding future growth assumptions. In evaluating the operating results, MSC Income Fund also analyzes the impact of exposure to litigation, loss of customers or other contingencies. After determining the appropriate enterprise value, MSC Income Fund allocates the enterprise value to investments in order of the legal priority of the various components of the portfolio company’s capital structure. In applying the Waterfall valuation method, MSC Income Fund assumes the loans are paid-off at the principal amount in a change in control transaction and are not assumed by the buyer, which MSC Income Fund believes is consistent with its past transaction history and standard industry practices.

Under the Yield-to-Maturity valuation method, MSC Income Fund also uses the income approach to determine the fair value of debt securities based on projections of the discounted future free cash flows that the debt security will likely generate, including analyzing the discounted cash flows of interest and principal amounts for the debt security, as set forth in the associated loan agreements, as well as the financial position and credit risk of the portfolio company. MSC Income Fund’s estimate of the expected repayment date of its debt securities is generally the maturity date of the instrument, as MSC Income Fund generally intends to hold its loans and debt securities to maturity. The Yield-to-Maturity analysis also considers changes in leverage levels, credit quality, portfolio company performance, changes in market-based interest rates and other factors. MSC Income Fund will generally use the value determined by the Yield-to-Maturity analysis as the fair value for that security; however, because of MSC Income Fund’s general intent to hold its loans to maturity, the fair value will not exceed the principal amount of the debt security valued using the Yield-to-Maturity valuation method. A change in the assumptions that MSC Income Fund uses to estimate the fair value of its debt securities using the Yield-to-Maturity valuation method could have a material impact on the determination of fair value. If there is deterioration in credit quality or if a debt security is in workout status, MSC Income Fund may consider other factors in determining the fair value of the debt security, including the value attributable to the debt security from the enterprise value of the portfolio company or the proceeds that would most likely be received in a liquidation analysis.

Under the NAV valuation method, for an investment in an investment fund that does not have a readily determinable fair value, MSC Income Fund measures the fair value of the investment predominately based on the NAV of the investment fund as of the measurement date and adjusts the investment’s fair value for factors known to MSC Income Fund that would affect that fund’s NAV, including, but not limited to, fair values for individual investments held by the fund if MSC Income Fund holds the same investment or for a publicly traded investment. In addition, in determining the fair value of the investment, MSC Income Fund considers whether adjustments to the NAV are necessary in certain circumstances, based on the analysis of any restrictions on redemption of MSC Income Fund’s investment as of the measurement date, recent actual sales or redemptions of interests in the investment fund, and expected future cash flows available to equity holders, including the rate of return on those cash flows compared to an implied market return on equity required by market participants, or other uncertainties surrounding MSC Income Fund’s ability to realize the full NAV of its interests in the investment fund.

Pursuant to its internal valuation process and the requirements under the 1940 Act, MSC Income Fund performs valuation procedures on each of its portfolio investments quarterly. In addition to its internal valuation process, in arriving at estimates of fair value for its investments in its Private Loan portfolio companies, MSC Income Fund, among other things, consults with a nationally recognized independent financial advisory services firm (the “Financial Advisory Firm”). The Financial Advisory Firm analyzes and provides observations and recommendations and an assurance certification regarding MSC Income Fund’s determinations of the fair value of its Private Loan portfolio company investments. The Financial Advisory Firm is generally consulted relative to MSC Income Fund’s investments in each Private Loan portfolio company at least once every calendar year, and for MSC Income Fund’s investments in new Private Loan portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In certain instances, MSC Income Fund may determine that it is not cost-effective, and as a result is not in its stockholders’ best interest, to consult with the Financial Advisory Firm on its investments in one or more Private Loan portfolio companies. Such instances include, but

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

are not limited to, situations where the fair value of MSC Income Fund’s investment in a Private Loan portfolio company is determined to be insignificant relative to the total Investment Portfolio. MSC Income Fund consulted with and received an assurance certification from the Financial Advisory Firm in arriving at its determination of fair value on its investments in a total of 26 Private Loan portfolio companies for the six months ended June 30, 2023, representing 36% of the total Private Loan portfolio at fair value as of June 30, 2023, and on a total of 22 Private Loan portfolio companies for the six months ended June 30, 2022, representing 41% of the total Private Loan portfolio at fair value as of June 30, 2022. Excluding its investments in Private Loan portfolio companies that, as of June 30, 2023 and 2022, as applicable, had not been in the Investment Portfolio for at least twelve months subsequent to the initial investment and its investments in Private Loan portfolio companies that were not reviewed because the investment is valued based upon third-party quotes or other independent pricing, the percentage of the Private Loan portfolio reviewed and certified by the Financial Advisory Firm for the six months ended June 30, 2023 and 2022 was 40% and 48% of the total Private Loan portfolio at fair value, respectively.

For valuation purposes, all of MSC Income Fund’s Private Loan portfolio investments are non-control investments. For Private Loan portfolio investments for which it has determined that third-party quotes or other independent pricing are not available or appropriate, MSC Income Fund generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value such Private Loan debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method and such Private Loan equity investments in a current hypothetical sale using the Waterfall valuation method.

In addition to its internal valuation process, in arriving at estimates of fair value for its investments in its LMM portfolio companies, MSC Income Fund, among other things, consults with the Financial Advisory Firm. The Financial Advisory Firm analyzes and provides observations, recommendations and an assurance certification regarding MSC Income Fund’s determinations of the fair value of its LMM portfolio company investments. The Financial Advisory Firm is generally consulted relative to MSC Income Fund’s investments in each LMM portfolio company at least once every calendar year, and for MSC Income Fund’s investments in new LMM portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In certain instances, MSC Income Fund may determine that it is not cost-effective, and as a result is not in its stockholders’ best interest, to consult with the Financial Advisory Firm on its investments in one or more LMM portfolio companies. Such instances include, but are not limited to, situations where the fair value of MSC Income Fund’s investment in a LMM portfolio company is determined to be insignificant relative to the total Investment Portfolio. MSC Income Fund consulted with and received an assurance certification from the Financial Advisory Firm in arriving at MSC Income Fund’s determination of fair value on its investments in a total of 25 LMM portfolio companies for the six months ended June 30, 2023, representing 55% of the total LMM portfolio at fair value as of June 30, 2023, and on a total of 24 LMM portfolio companies for the six months ended June 30, 2022, representing 60% of the total LMM portfolio at fair value as of June 30, 2022. Excluding its investments in LMM portfolio companies that, as of June 30, 2023 and 2022, as applicable, had not been in the Investment Portfolio for at least twelve months subsequent to the initial investment or whose primary purpose is to own real estate for which a third-party appraisal is obtained on at least an annual basis, the percentage of the LMM portfolio reviewed and certified by the Financial Advisory Firm for the six months ended June 30, 2023 and 2022 was 59% and 63% of the total LMM portfolio at fair value, respectively.

For valuation purposes, all of MSC Income Fund’s Middle Market portfolio investments are non-control investments. To the extent sufficient observable inputs are available to determine fair value, MSC Income Fund uses observable inputs to determine the fair value of these investments through obtaining third-party quotes or other independent pricing. For Middle Market portfolio investments for which it has determined that third-party quotes or other independent pricing are not available or appropriate, MSC Income Fund generally estimates the fair value based on the assumptions that it believes hypothetical market participants would use to value such Middle Market debt investments in a current hypothetical sale using the Yield-to-Maturity valuation method and such Middle Market equity investments in a current hypothetical sale using the Waterfall valuation method. MSC Income Fund generally consults on a limited basis with the Financial Advisory Firm in connection with determining the fair value of its Middle Market portfolio investments due to the nature of these investments. The vast majority (93% and 91% as of June 30, 2023 and December 31, 2022, respectively) of the Middle Market portfolio investments (i) are valued using third-party quotes or other independent pricing services, (ii) MSC Income Fund has consulted with and received an assurance certification from the Financial Advisory Firm within the last twelve months or (iii) are new investments that have not been in the Investment Portfolio for at least twelve months subsequent to the initial investment.

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

For valuation purposes, all of MSC Income Fund’s Other Portfolio investments are non-control investments. MSC Income Fund’s Other Portfolio investments comprised 2.5% and 2.7% of MSC Income Fund’s Investment Portfolio at fair value as of June 30, 2023 and December 31, 2022, respectively. Similar to the LMM investment portfolio, market quotations for Other Portfolio equity investments are generally not readily available. For its Other Portfolio equity investments, MSC Income Fund generally determines the fair value of these investments using the NAV valuation method.

Due to the inherent uncertainty in the valuation process, MSC Income Fund’s determination of fair value for its Investment Portfolio may differ materially from the values that would have been determined had a ready market for the securities existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned. MSC Income Fund determines the fair value of each individual investment and records changes in fair value as unrealized appreciation or depreciation.

MSC Income Fund uses an internally developed portfolio investment rating system in connection with its investment oversight, portfolio management and analysis and investment valuation procedures for its Private Loan, LMM and Middle Market portfolio companies. This system takes into account both quantitative and qualitative factors of each Private Loan, LMM and Middle Market portfolio company.

In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which permits a BDC’s board of directors to designate its executive officers or investment adviser as a valuation designee to determine the fair value for its investment portfolio, subject to the active oversight of the board. MSC Income Fund’s Board of Directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation Procedures”) and has designated the Adviser, led by a group of Main Street’s and the Adviser’s executive officers, to serve as the Board of Directors’ valuation designee. MSC Income Fund believes its Investment Portfolio as of June 30, 2023 and December 31, 2022 approximates fair value as of those dates based on the markets in which it operates and other conditions in existence on those reporting dates.

2.Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results may differ from these estimates under different conditions or assumptions. Additionally, as explained in Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio, the consolidated financial statements include investments in the Investment Portfolio whose values have been estimated by MSC Income Fund pursuant to valuation policies and procedures approved and overseen by MSC Income Fund’s Board of Directors, in the absence of readily ascertainable market values. Because of the inherent uncertainty of the Investment Portfolio valuations, those estimated values may differ materially from the values that would have been determined had a ready market for the securities existed.

Macroeconomic factors, including pandemics, risk of recession, inflation, supply chain constraints or disruptions, geopolitical disruptions and rising market index interest rates, and the related effect on the U.S. and global economies, have impacted, and may continue to impact, the businesses and operating results of certain of MSC Income Fund’s portfolio companies. As a result of these and other current effects of macroeconomic factors, as well as the uncertainty regarding the extent and duration of their impact, the valuation of MSC Income Fund’s Investment Portfolio has and may continue to experience increased volatility.

3.Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase. These highly liquid, short-term investments are included in the Consolidated Schedule of Investments. Cash and cash equivalents are carried at cost, which approximates fair value. At June 30, 2023, the Company had investments in short-term money market accounts and money market funds totaling $0.8 million and $18.2 million, respectively, classified as cash equivalents. At December 31, 2022, the Company had investments in short-term money market accounts totaling $8.3 million classified as cash equivalents.

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

At June 30, 2023 and December 31, 2022, cash balances, including money market accounts but excluding money market funds, totaling $10.5 million and $11.7 million, respectively, exceeded Federal Deposit Insurance Corporation insurance protection levels, subjecting the Company to risk related to the uninsured balance. All of the Company’s cash deposits are held at large established high credit quality financial institutions, and management believes that the risk of loss associated with any uninsured balances is remote.

4.Interest, Dividend and Fee Income

MSC Income Fund records interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded when dividends are declared by the portfolio company or at such other time that an obligation exists for the portfolio company to make a distribution. MSC Income Fund evaluates accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if MSC Income Fund otherwise does not expect the debtor to be able to service its debt obligation, MSC Income Fund will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding the debtor’s ability to service the debt obligation, or if a loan or debt security is sold or written off, MSC Income Fund removes it from non-accrual status.

As of June 30, 2023, MSC Income Fund’s total Investment Portfolio had four investments on non-accrual status, which comprised 0.3% of its fair value and 2.8% of its cost. As of December 31, 2022, MSC Income Fund’s total Investment Portfolio had seven investments on non-accrual status, which comprised 0.8% of its fair value and 4.8% of its cost.

MSC Income Fund holds certain debt and preferred equity instruments in its Investment Portfolio that contain payment-in-kind (“PIK”) interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax treatment (as discussed in Note B.7. — Summary of Significant Accounting Policies — Income Taxes below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though MSC Income Fund may not have collected the PIK interest and cumulative dividends in cash. MSC Income Fund stops accruing PIK interest and cumulative dividends and writes off any accrued and uncollected interest and dividends in arrears when it determines that such PIK interest and dividends in arrears are no longer collectible. For the three months ended June 30, 2023 and 2022, (i) 3.4% and 3.5%, respectively, of MSC Income Fund’s total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.1% and 0.3%, respectively, of MSC Income Fund’s total investment income was attributable to cumulative dividend income not paid currently in cash. For the six months ended June 30, 2023 and 2022, (i) 3.6% and 2.7%, respectively, of MSC Income Fund’s total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.1% and 1.1%, respectively, of MSC Income Fund’s total investment income was attributable to cumulative dividend income not paid currently in cash.

MSC Income Fund may periodically provide services, including structuring and advisory services, to its portfolio companies or other third parties. For services that are separately identifiable and evidence exists to substantiate fair value, fee income is recognized as earned. Fees received in connection with debt financing transactions are generally deferred and accreted into income over the life of the financing.

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

A presentation of total investment income MSC Income Fund received from its Investment Portfolio in each of the periods presented is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(dollars in thousands)
Interest, fee and dividend income:
Interest income	$	28,459	$	21,162	$	57,391	$	41,231
Dividend income	3,904		2,471		5,463		5,264
Fee income	865		706		1,420		1,245
Total interest, fee and dividend income	$	33,228	$	24,339	$	64,274	$	47,740

5.Deferred Financing Costs

Deferred financing costs include commitment fees and other direct costs incurred in connection with arranging MSC Income Fund’s borrowings. These costs were incurred in connection with MSC Income Fund’s multi-year revolving Credit Facilities (as defined below in Note D — Debt) and have been capitalized as an asset and reflected in the Consolidated Balance Sheets as Deferred financing costs. Deferred financing costs incurred in connection with the Series A Notes (as defined below in Note D — Debt) are a direct deduction from the principal amount outstanding.

6.Unearned Income—Debt Origination Fees and Original Issue Discount and Discounts / Premiums to Par Value

MSC Income Fund capitalizes debt origination fees received in connection with financings and reflects such fees as unearned income netted against the applicable debt investments. The unearned income from the fees is accreted into income over the life of the financing.

In connection with its portfolio debt investments, MSC Income Fund sometimes receives nominal cost warrants or warrants with an exercise price below the fair value of the underlying equity (together, “nominal cost equity”) that are valued as part of the negotiation process with the particular portfolio company. When MSC Income Fund receives nominal cost equity, it allocates its cost basis in its investment between its debt security and its nominal cost equity at the time of origination based on amounts negotiated with the particular portfolio company. The allocated amounts are based upon the fair value of the nominal cost equity, which is then used to determine the allocation of cost to the debt security. Any discount recorded on a debt investment resulting from this allocation is reflected as unearned income, which is netted against the applicable debt investment, and accreted into interest income over the life of the debt investment. The actual collection of this interest is deferred until the time of debt principal repayment.

MSC Income Fund may also purchase debt securities at a discount or at a premium to the par value of the debt security. In the case of a purchase at a discount, MSC Income Fund records the investment at the par value of the debt security net of the discount, and the discount is accreted into interest income over the life of the debt investment. In the case of a purchase at a premium, MSC Income Fund records the investment at the par value of the debt security plus the premium, and the premium is amortized as a reduction to interest income over the life of the debt investment.

To maintain RIC tax treatment (as discussed in Note B.7. — Summary of Significant Accounting Policies — Income Taxes below), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though MSC Income Fund may not have collected the interest income. For both of the three months ended June 30, 2023 and 2022, 2.6% of MSC Income Fund’s total investment income was attributable to interest income from the accretion of discounts associated with debt investments, net of any premium reduction. For the six months ended June 30, 2023 and 2022, 2.6% and 2.7%, respectively, of MSC Income Fund’s total investment income was attributable to interest income from the accretion of discounts associated with debt investments, net of any premium reduction.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

7.Income Taxes

MSIF has elected to be treated for U.S. federal income tax purposes as a RIC. MSIF’s taxable income includes the taxable income generated by MSIF and certain of its subsidiaries, including the Structured Subsidiaries, which are treated as disregarded entities for tax purposes. As a RIC, MSIF generally will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that MSIF distributes to its stockholders. MSIF must generally distribute at least 90% of its “investment company taxable income” (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given fiscal year may be distributed up to twelve months subsequent to the end of that fiscal year, provided such dividends are declared on or prior to the later of (i) the filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated.

The Taxable Subsidiaries primarily hold certain equity investments for MSC Income Fund. The Taxable Subsidiaries permit MSC Income Fund to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes and to continue to comply with the “source-of-income” requirements contained in the RIC tax provisions of the Code. The Taxable Subsidiaries are consolidated with MSC Income Fund for U.S. GAAP financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in MSC Income Fund’s consolidated financial statements as portfolio investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSIF for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from their book income, or loss, due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at corporate income tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in MSC Income Fund’s consolidated financial statements.

The Taxable Subsidiaries use the liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, using statutory tax rates in effect for the year in which the temporary differences are expected to reverse. A valuation allowance is provided, if necessary, against deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. MSC Income Fund’s net assets as included on the Consolidated Balance Sheets and Consolidated Statements of Changes in Net Assets include an adjustment to classification as a result of permanent book-to-tax differences, which include differences in the book and tax treatment of income and expenses.

Taxable income generally differs from net income for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses. Taxable income generally excludes net unrealized appreciation or depreciation, as investment gains or losses are not included in taxable income until they are realized.

8.Net Realized Gains or Losses and Net Unrealized Appreciation or Depreciation

Realized gains or losses are measured by the difference between the net proceeds from the sale or redemption of an investment or a financial instrument and the cost basis of the investment or financial instrument, without regard to unrealized appreciation or depreciation previously recognized, and includes investments written-off during the period net of recoveries and realized gains or losses from in-kind redemptions. Net unrealized appreciation or depreciation reflects the net change in the fair value of the Investment Portfolio and financial instruments and the reclassification of any prior period unrealized appreciation or depreciation on exited investments and financial instruments to realized gains or losses.

9.Fair Value of Financial Instruments

Fair value estimates are made at discrete points in time based on relevant information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. MSC Income Fund believes that the carrying amounts of its financial instruments, consisting of cash and cash

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

equivalents, receivables, payables and other liabilities approximate the fair values of such items due to the short-term nature of these instruments.

To estimate the fair value of MSC Income Fund’s Series A Notes as disclosed in Note D — Debt, MSC Income Fund uses the Yield-to-Maturity valuation method based on projections of the discounted future free cash flows that the debt security will likely generate, including both the discounted cash flows of the associated interest and principal amounts for the debt security.

10.Earnings per Share

Net increase in net assets resulting from operations per share and net investment income per share are computed utilizing the weighted-average number of shares of common stock outstanding for the period.

11.Recently Issued or Adopted Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference rate reform (Topic 848) — Facilitation of the effects of reference rate reform on financial reporting. The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to certain contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform and became effective upon issuance for all entities. The Company has agreements that have LIBOR as a reference rate with certain portfolio companies and also with certain lenders. Many of these agreements include language for choosing an alternative successor rate if LIBOR reference is no longer considered to be appropriate. Contract modifications are required to be evaluated in determining whether the modifications result in the establishment of new contracts or the continuation of existing contracts. The Company adopted this amendment in March 2020 and plans to apply the amendments in this update to account for contract modifications due to changes in reference rates when LIBOR reference is no longer used.

In November 2022, the FASB issued ASU 2022-06, Reference rate reform (Topic 848) — Deferral of the Sunset Date of Topic 848, which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024 after which entities will no longer be permitted to apply the relief in Topic 848. The Company utilized the optional expedients and exceptions provided by ASU 2020-04 and extended by ASU 2022-06 during the six months ended June 30, 2023 and the year ended December 31, 2022, the effect of which was not material to the consolidated financial statements and the notes thereto. The Company will continue to utilize the optional expedients provided by ASU 2020-04 and extended by ASU 2022-06 through December 31, 2024. The Company does not expect ASU 2022-06 to have a material impact to the consolidated financial statements and the notes thereto.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this update provide that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments in this update also require additional disclosures for equity securities subject to contractual sales restrictions. ASU 2022-03 is effective for years beginning after December 15, 2023, though early adoption is permitted. The Company elected to early adopt ASU 2022-03 as of December 31, 2022 and it did not have a material impact on the consolidated financial statements and the notes thereto.

From time to time, new accounting pronouncements are issued by the FASB or other standards-setting bodies that are adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards and any that are not yet effective will not have a material impact on its consolidated financial statements upon adoption.

NOTE C — FAIR VALUE HIERARCHY FOR INVESTMENTS—PORTFOLIO COMPOSITION

ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and enhances disclosure requirements for fair value measurements. MSC Income Fund accounts for its investments at fair value.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Fair Value Hierarchy

In accordance with ASC 820, MSC Income Fund has categorized its investments based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical investments (Level 1) and the lowest priority to unobservable inputs (Level 3).

Investments recorded on MSC Income Fund’s Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1 — Investments whose values are based on unadjusted quoted prices for identical assets in an active market that MSC Income Fund has the ability to access (examples include investments in active exchange-traded equity securities and investments in most U.S. government and agency securities).

Level 2 — Investments whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the investment. Level 2 inputs include the following:

•Quoted prices for similar assets in active markets (for example, investments in restricted stock);

•Quoted prices for identical or similar assets in non-active markets (for example, investments in thinly traded public companies);

•Pricing models whose inputs are observable for substantially the full term of the investment (for example, market interest rate indices); and

•Pricing models whose inputs are derived principally from, or corroborated by, observable market data through correlation or other means for substantially the full term of the investment.

Level 3 — Investments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (for example, investments in illiquid securities issued by privately held companies). These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the investment.

As required by ASC 820, when the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3). Therefore, unrealized appreciation and depreciation related to such investments categorized within the Level 3 tables below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

As of June 30, 2023 and December 31, 2022, MSC Income Fund’s Private Loan portfolio investments primarily consisted of investments in interest-bearing secured debt investments. The fair value determination for these investments consisted of a combination of observable inputs in non-active markets for which sufficient observable inputs were not available to determine the fair value of these investments and unobservable inputs. As a result, all of MSC Income Fund’s Private Loan portfolio investments were categorized as Level 3 as of June 30, 2023 and December 31, 2022.

As of June 30, 2023 and December 31, 2022, all of MSC Income Fund’s LMM portfolio investments consisted of illiquid securities issued by privately held companies and the fair value determination for these investments primarily consisted of unobservable inputs. As a result, all of MSC Income Fund’s LMM portfolio investments were categorized as Level 3 as of June 30, 2023 and December 31, 2022.

As of June 30, 2023 and December 31, 2022, MSC Income Fund’s Middle Market portfolio investments consisted primarily of investments in secured and unsecured debt investments and independently rated debt investments. The fair value determination for these investments consisted of a combination of observable inputs in non-active markets for which

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

sufficient observable inputs were not available to determine the fair value of these investments and unobservable inputs. As a result, all of MSC Income Fund’s Middle Market portfolio investments were categorized as Level 3 as of June 30, 2023 and December 31, 2022.

As of June 30, 2023 and December 31, 2022, MSC Income Fund’s Other Portfolio investments consisted of illiquid securities issued by privately held entities and the fair value determination for these investments primarily consisted of unobservable inputs. As a result, all of MSC Income Fund’s Other Portfolio investments were categorized as Level 3 as of June 30, 2023 and December 31, 2022.

The fair value determination of each portfolio investment categorized as Level 3 required one or more of the following unobservable inputs:

•Financial information obtained from each portfolio company, including unaudited statements of operations and balance sheets for the most recent period available as compared to budgeted numbers;

•Current and projected financial condition of the portfolio company;

•Current and projected ability of the portfolio company to service its debt obligations;

•Type and amount of collateral, if any, underlying the investment;

•Current financial ratios (e.g., fixed charge coverage ratio, interest coverage ratio and net debt/ EBITDA ratio) applicable to the investment;

•Current liquidity of the investment and related financial ratios (e.g., current ratio and quick ratio);

•Pending debt or capital restructuring of the portfolio company;

•Projected operating results of the portfolio company;

•Current information regarding any offers to purchase the investment;

•Current ability of the portfolio company to raise any additional financing as needed;

•Changes in the economic environment which may have a material impact on the operating results of the portfolio company;

•Internal occurrences that may have an impact (both positive and negative) on the operating performance of the portfolio company;

•Qualitative assessment of key management;

•Contractual rights, obligations or restrictions associated with the investment; and

•Other factors deemed relevant.

The use of significant unobservable inputs creates uncertainty in the measurement of fair value as of the reporting date. The significant unobservable inputs used in the fair value measurement of MSC Income Fund’s LMM equity securities, which are generally valued through an average of the discounted cash flow technique and the market comparable/enterprise value technique (unless one of these approaches is determined to not be appropriate), are (i) EBITDA multiples and (ii) the weighted-average cost of capital (“WACC”). Significant increases (decreases) in EBITDA multiple inputs in isolation would result in a significantly higher (lower) fair value measurement. On the contrary, significant increases (decreases) in WACC inputs in isolation would result in a significantly lower (higher) fair value measurement. The significant unobservable inputs used in the fair value measurement of MSC Income Fund’s Private

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Loan, LMM and Middle Market securities are (i) risk adjusted discount rates used in the Yield-to-Maturity valuation technique (see Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio) and (ii) the percentage of expected principal recovery. Significant increases (decreases) in any of these discount rates in isolation would result in a significantly lower (higher) fair value measurement. Significant increases (decreases) in any of these expected principal recovery percentages in isolation would result in a significantly higher (lower) fair value measurement. However, due to the nature of certain investments, fair value measurements may be based on other criteria, such as third-party appraisals of collateral and fair values as determined by independent third parties, which are not presented in the tables below.

The following tables provide a summary of the significant unobservable inputs used to fair value MSC Income Fund’s Level 3 portfolio investments as of June 30, 2023 and December 31, 2022:


Type of Investment	Fair Value as of June 30, 2023 (in thousands)		Valuation Technique	Significant Unobservable Inputs	Range(3)	Weighted Average(3)		Median(3)
Equity investments	$	237,177	Discounted cash flow	WACC	10.3% - 22.3%	14.3	%	15.3	%
			Market comparable / Enterprise value	EBITDA multiple (1)	4.5x - 8.5x (2)	7.1x		6.4x
Debt investments	$	768,881	Discounted cash flow	Risk adjusted discount factor	5.9% - 15.6% (2)	10.5	%	10.6	%
				Expected principal recovery percentage	0.8% - 100.0%	99.6	%	100.0	%
Debt investments	$	80,360	Market approach	Third-party quote	4.5 - 97.5	85.2		94.0
Total Level 3 investments	$	1,086,418

_____________________

(1)EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each investment.

(2)Range excludes outliers that are greater than one standard deviation from the mean. Including these outliers, the range for EBITDA multiple is 2.0x - 15.7x and the range for risk adjusted discount factor is 3.8% - 33.5%.

(3)Does not include investments for which the valuation technique does not include the use of the applicable fair value input.


Type of Investment	Fair Value as of December 31, 2022 (in thousands)		Valuation Technique	Significant Unobservable Inputs	Range(3)	Weighted Average(3)		Median(3)
Equity investments	$	215,861	Discounted cash flow	WACC	10.4% - 22.5%	14.3	%	15.7	%
			Market comparable / Enterprise value	EBITDA multiple (1)	4.3x - 8.5x (2)	7.2x		6.4x
Debt investments	$	743,887	Discounted cash flow	Risk adjusted discount factor	5.3% - 15.8% (2)	10.1	%	9.6	%
				Expected principal recovery percentage	0.7% - 100.0%	99.1	%	100.0	%
Debt investments	$	108,395	Market approach	Third-party quote	5.6 - 98.5	85.7		90.0
Total Level 3 investments	$	1,068,143

_____________________

(1)EBITDA may include proforma adjustments and/or other addbacks based on specific circumstances related to each investment.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

(3)Does not include investments for which the valuation technique does not include the use of the applicable fair value input.

The following tables provide a summary of changes in fair value of MSC Income Fund’s Level 3 portfolio investments for the six-month periods ended June 30, 2023 and 2022 (amounts in thousands):


Type of Investment	Fair Value as of December 31, 2022		Transfers Into Level 3 Hierarchy		Redemptions/ Repayments		New Investments		Net Changes from Unrealized to Realized		Net Unrealized Appreciation (Depreciation)		Other(1)		Fair Value as of June 30, 2023
Debt	$	852,282	$	—	$	(119,365)	$	108,857	$	25,167	$	(6,254)	$	(11,446)	$	849,241
Equity	214,687		—		(11,419)		8,061		1,167		11,061		12,551		236,108
Equity Warrant	1,174		—		—		523		—		477		(1,105)		1,069
	$	1,068,143	$	—	$	(130,784)	$	117,441	$	26,334	$	5,284	$	—	$	1,086,418

______________________

(1)Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information in the Consolidated Statements of Cash Flows.


Type of Investment	Fair Value as of December 31, 2021		Transfers Into Level 3 Hierarchy		Redemptions/ Repayments		New Investments		Net Changes from Unrealized to Realized		Net Unrealized Appreciation (Depreciation)		Other(1)		Fair Value as of June 30, 2022
Debt	$	879,970	$	—	$	(82,934)	$	115,610	$	(699)	$	(28,098)	$	(333)	$	883,516
Equity	196,374		—		(1,217)		4,099		(820)		23,018		333		221,787
Equity Warrant	792		—		—		—		—		(418)		—		374
	$	1,077,136	$	—	$	(84,151)	$	119,709	$	(1,519)	$	(5,498)	$	—	$	1,105,677

_____________________

(1)Includes the impact of non-cash conversions. These transactions represent non-cash investing activities. See additional cash flow information in the Consolidated Statements of Cash Flows.

At June 30, 2023 and December 31, 2022, MSC Income Fund's investments at fair value were categorized as follows in the fair value hierarchy for ASC 820 purposes:


			Fair Value Measurements
			(in thousands)
At June 30, 2023	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Private Loan portfolio investments	$	587,603	$	—	$	—	$	587,603
LMM portfolio investments	363,812		—		—		363,812
Middle Market portfolio investments	107,945		—		—		107,945
Other Portfolio investments	27,058		—		—		27,058
Total investments	$	1,086,418	$	—	$	—	$	1,086,418

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)


			Fair Value Measurements
			(in thousands)
At December 31, 2022	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Private Loan portfolio investments	$	559,763	$	—	$	—	$	559,763
LMM portfolio investments	352,661		—		—		352,661
Middle Market portfolio investments	126,744		—		—		126,744
Other Portfolio investments	28,975		—		—		28,975
Total investments	$	1,068,143	$	—	$	—	$	1,068,143

Investment Portfolio Composition

MSC Income Fund’s principal investment objective is to maximize its portfolio’s total return by generating current income from its debt investments and current income and capital appreciation from its equity and equity-related investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company. MSC Income Fund seeks to achieve its investment objective through its Private Loan, LMM and Middle Market investment strategies.

MSC Income Fund’s private loan (“Private Loan”) investment strategy is focused on investments in privately held companies that are generally consistent with the size of its LMM portfolio companies or Middle Market portfolio companies, and its Private Loan investments generally range in size from $1 million to $20 million. MSC Income Fund’s Private Loan investments primarily consist of debt securities that have primarily been originated directly by the Adviser or, to a lesser extent, by the Adviser through its strategic relationships with other investment funds on a collaborative basis through investments that are often referred to in the debt markets as “club deals” because of the small lender group size. In both cases, our Private Loan investments are typically made to support a company owned by or in the process of being acquired by a private equity sponsor. MSC Income Fund’s Private Loan portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and typically have a term of between three and seven years from the original investment date. MSC Income Fund may have the option to invest alongside the private equity sponsor in the equity securities of its Private Loan portfolio companies.

MSC Income Fund’s LMM investment strategy is focused on investments in secured debt, equity warrants and direct equity investments in privately held, LMM companies based in the United States. MSC Income Fund’s LMM portfolio companies generally have annual revenues between $10 million and $150 million, and its LMM investments generally range in size from $1 million to $20 million. The LMM debt investments are typically secured by a first priority lien on the assets of the portfolio company, can include either fixed or floating rate terms and generally have a term of between five and seven years from the original investment date. In most LMM portfolio investments, MSC Income Fund receives nominally priced equity warrants and/or makes direct equity investments in connection with a debt investment.

MSC Income Fund’s Middle Market investment strategy is focused on investments in syndicated loans to or debt securities in Middle Market companies, which MSC Income Fund defines as companies with annual revenues between $150 million and $1.5 billion, and its Middle Market investments generally range in size from $1 million to $20 million. MSC Income Fund’s Middle Market portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and typically have an expected duration of between three and seven years from the original investment date.

MSC Income Fund’s other portfolio (“Other Portfolio”) investments primarily consist of investments that are not consistent with the typical profiles for its Private Loan, LMM or Middle Market portfolio investments, including investments which may be managed by third parties. In the Other Portfolio, MSC Income Fund may incur indirect fees and expenses in connection with investments managed by third parties, such as investments in other investment companies or private funds. For Other Portfolio investments, MSC Income Fund generally receives distributions related to the assets held by the portfolio company. Those assets are typically expected to be liquidated over a five to ten-year period.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Investment income, consisting of interest, dividends and fees, can fluctuate dramatically due to various factors, including the level of new investment activity, repayments of debt investments or sales of equity interests. Investment income in any given year could also be highly concentrated among several portfolio companies. For the three and six months ended June 30, 2023 and 2022, MSC Income Fund did not record investment income from any single portfolio company in excess of 10% of total investment income.

The following tables provide a summary of MSC Income Fund’s investments in the Private Loan, LMM and Middle Market portfolios as of June 30, 2023 and December 31, 2022 (this information excludes Other Portfolio investments, which are discussed further below).


	As of June 30, 2023
	Private Loan			LMM (a)			Middle Market
	(dollars in millions)
Number of portfolio companies	76			49			19
Fair value	$	587.6		$	363.8		$	107.9
Cost	$	583.0		$	303.3		$	137.2
Debt investments as a % of portfolio (at cost)	95.7		%	70.2		%	94.2		%
Equity investments as a % of portfolio (at cost)	4.3		%	29.8		%	5.8		%
% of debt investments at cost secured by first priority lien	99.4		%	100.0		%	100.0		%
Weighted-average annual effective yield (b)	12.9		%	12.9		%	12.1		%
Average EBITDA (c)	$	33.3		$	8.4		$	78.3

___________________

(a)At June 30, 2023, MSC Income Fund had equity ownership in all of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%.

(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of June 30, 2023, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on MSC Income Fund’s debt portfolio as of June 30, 2023 including debt investments on non-accrual status was 12.6% for its Private Loan portfolio, 12.9% for its LMM portfolio and 10.4% for its Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of MSC Income Fund’s common stock will realize on its investment because it does not reflect MSC Income Fund’s utilization of debt capital in its capital structure, MSC Income Fund’s expenses or any sales load paid by an investor.

(c)The average EBITDA is calculated using a weighted-average for the Private Loan and Middle Market portfolios and a simple average for the LMM portfolio. These calculations exclude certain portfolio companies, including one Private Loan portfolio company, as EBITDA is not a meaningful valuation metric for MSC Income Fund’s investment in this portfolio company, and those portfolio companies whose primary purpose is to own real estate.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)


	As of December 31, 2022
	Private Loan			LMM (a)			Middle Market
	(dollars in millions)
Number of portfolio companies	70			48			21
Fair value	$	559.8		$	352.7		$	126.7
Cost	$	563.0		$	312.5		$	159.7
Debt investments as a % of portfolio (at cost)	96.2		%	73.2		%	95.0		%
Equity investments as a % of portfolio (at cost)	3.8		%	26.8		%	5.0		%
% of debt investments at cost secured by first priority lien	99.4		%	99.9		%	98.5		%
Weighted-average annual effective yield (b)	11.8		%	12.1		%	11.3		%
Average EBITDA (c)	$	36.8		$	8.6		$	79.2

___________________

(a)At December 31, 2022, MSC Income Fund had equity ownership in all of its LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%.

(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2022, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on MSC Income Fund’s debt portfolio as of December 31, 2022 including debt investments on non-accrual status was 11.4% for its Private Loan portfolio, 11.7% for its LMM portfolio and 9.7% for its Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of MSC Income Fund’s common stock will realize on its investment because it does not reflect MSC Income Fund’s utilization of debt capital in its capital structure, MSC Income Fund’s expenses or any sales load paid by an investor.

For the three months ended June 30, 2023 and 2022, MSC Income Fund achieved an annualized total return on investments of 15.2% and 5.2%, respectively. For the six months ended June 30, 2023 and 2022, MSC Income Fund achieved an annualized total return on investments of 13.3% and 7.7%, respectively. For the year ended December 31, 2022, MSC Income Fund achieved a total return on investments of 9.1%. Total return on investments is calculated using the interest, dividend and fee income, as well as the realized and unrealized change in fair value of the Investment Portfolio for the specified period. MSC Income Fund’s total return on investments is not reflective of what an investor in shares of MSC Income Fund’s common stock will realize on its investment because it does not reflect MSC Income Fund’s utilization of debt capital in its capital structure, MSC Income Fund’s expenses or any sales load paid by an investor.

As of June 30, 2023, MSC Income Fund had Other Portfolio investments in four entities, collectively totaling $27.1 million in fair value and $23.1 million in cost basis and which comprised 2.5% and 2.2% of MSC Income Fund’s Investment Portfolio at fair value and cost, respectively. As of December 31, 2022, MSC Income Fund had Other Portfolio investments in four entities, collectively totaling $29.0 million in fair value and $24.7 million in cost basis and which comprised 2.7% and 2.3% of MSC Income Fund’s Investment Portfolio at fair value and cost, respectively.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

The following tables summarize the composition of MSC Income Fund’s total combined Private Loan, LMM and Middle Market portfolio investments at cost and fair value by type of investment as a percentage of the total combined Private Loan, LMM and Middle Market portfolio investments, as of June 30, 2023 and December 31, 2022 (this information excludes Other Portfolio investments, which are discussed above).


Cost:	June 30, 2023		December 31, 2022
First lien debt	87.6	%	88.5	%
Equity	11.9		10.8
Second lien debt	0.3		0.3
Equity warrants	0.2		0.2
Other	—		0.2
	100.0	%	100.0	%


Fair Value:	June 30, 2023		December 31, 2022
First lien debt	79.9	%	81.4	%
Equity	19.7		17.9
Second lien debt	0.3		0.3
Equity warrants	0.1		0.1
Other	—		0.3
	100.0	%	100.0	%

The following tables summarize the composition of MSC Income Fund’s total combined Private Loan, LMM and Middle Market portfolio investments by geographic region of the United States and other countries at cost and fair value as a percentage of the total combined Private Loan, LMM and Middle Market portfolio investments, as of June 30, 2023 and December 31, 2022 (this information excludes Other Portfolio investments). The geographic composition is determined by the location of the corporate headquarters of the portfolio company.


Cost:	June 30, 2023		December 31, 2022
Southwest	22.7	%	22.2	%
Northeast	21.4		20.3
Southeast	19.9		17.8
West	18.3		22.9
Midwest	15.8		15.1
Other Non-United States	1.1		0.9
Canada	0.8		0.8
	100.0	%	100.0	%


Fair Value:	June 30, 2023		December 31, 2022
Southwest	25.9	%	25.3	%
Northeast	21.7		20.3
West	17.6		21.1
Southeast	16.7		15.2
Midwest	16.2		15.9
Other Non-United States	1.1		1.0
Canada	0.8		1.2
	100.0	%	100.0	%

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

MSC Income Fund’s Private Loan, LMM and Middle Market portfolio investments are in companies conducting business in a variety of industries. The following tables summarize the composition of MSC Income Fund’s total combined Private Loan, LMM and Middle Market portfolio investments by industry at cost and fair value as of June 30, 2023 and December 31, 2022 (this information excludes Other Portfolio investments).


Cost:	June 30, 2023		December 31, 2022
Commercial Services & Supplies	9.8	%	11.3	%
Internet Software & Services	8.7		7.8
Health Care Providers & Services	6.3		4.9
Machinery	5.4		5.9
IT Services	5.2		4.9
Diversified Consumer Services	5.1		4.7
Distributors	4.4		5.0
Professional Services	4.3		3.7
Leisure Equipment & Products	3.7		3.7
Textiles, Apparel & Luxury Goods	3.2		2.0
Computers & Peripherals	2.9		1.9
Specialty Retail	2.8		4.0
Communications Equipment	2.7		3.5
Diversified Telecommunication Services	2.6		3.4
Media	2.6		2.4
Electrical Equipment	2.6		1.8
Construction & Engineering	2.5		2.5
Aerospace & Defense	2.3		3.6
Containers & Packaging	2.3		3.4
Building Products	2.3		2.4
Hotels, Restaurants & Leisure	2.0		2.0
Household Products	2.0		1.5
Diversified Financial Services	1.7		1.7
Internet & Catalog Retail	1.5		1.3
Software	1.4		1.3
Health Care Equipment & Supplies	1.3		1.2
Energy Equipment & Services	1.2		1.2
Food Products	0.9		1.1






























Other (1)	6.3		5.9
	100.0	%	100.0	%

___________________

(1)Includes various industries with each industry individually less than 1.0% of the total combined Private Loan, LMM and Middle Market portfolio investments at each date.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)


Fair Value:	June 30, 2023		December 31, 2022
Commercial Services & Supplies	8.4	%	10.3	%
Internet Software & Services	7.4		6.7
Machinery	6.9		7.5
Diversified Consumer Services	6.3		5.9
Health Care Providers & Services	5.8		4.6
IT Services	4.9		4.7
Distributors	4.6		5.5
Professional Services	4.2		2.8
Computers & Peripherals	4.1		2.8
Leisure Equipment & Products	3.5		3.7
Textiles, Apparel & Luxury Goods	3.0		2.0
Construction & Engineering	2.9		2.9
Specialty Retail	2.8		3.1
Media	2.8		2.6
Electrical Equipment	2.7		1.9
Containers & Packaging	2.6		3.8
Diversified Telecommunication Services	2.4		3.6
Construction Materials	2.4		2.1
Building Products	2.3		2.5
Aerospace & Defense	2.2		3.5
Household Products	1.9		1.3
Software	1.8		1.7
Internet & Catalog Retail	1.7		1.9
Air Freight & Logistics	1.7		1.2
Diversified Financial Services	1.6		1.8
Hotels, Restaurants & Leisure	1.5		1.5
Communications Equipment	1.2		1.3
Energy Equipment & Services	1.0		1.0






























Other (1)	5.4		5.8
	100.0	%	100.0	%

___________________

(1)Includes various industries with each industry individually less than 1.0% of the total combined Private Loan, LMM and Middle Market portfolio investments at each date.

At June 30, 2023 and December 31, 2022, MSC Income Fund had no portfolio investment that was greater than 10% of the Investment Portfolio at fair value.

Unconsolidated Significant Subsidiaries

In accordance with Rules 3-09 and 4-08(g) of Regulation S-X, MSC Income Fund must determine which of its unconsolidated controlled portfolio companies, if any, are considered “significant subsidiaries.” In evaluating its unconsolidated controlled portfolio companies in accordance with Regulation S-X, there are two tests that MSC Income Fund must utilize to determine if any of MSC Income Fund’s Control Investments (as defined in Note A — Organization and Basis of Presentation, including those unconsolidated portfolio companies defined as Control Investments in which MSC Income Fund does not own greater than 50% of the voting securities nor have rights to maintain greater than 50% of the board representation) are considered significant subsidiaries: the investment test and the income test. The investment

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

test is generally measured by dividing MSC Income Fund’s investment in the Control Investment by the value of MSC Income Fund’s total investments. The income test is generally measured by dividing the absolute value of the combined sum of total investment income, net realized gain (loss) and net unrealized appreciation (depreciation) from the relevant Control Investment for the period being tested by the absolute value of MSC Income Fund’s change in net assets resulting from operations for the same period. Rules 3-09 and 4-08(g) of Regulation S-X require MSC Income Fund to include (1) separate audited financial statements of an unconsolidated majority-owned subsidiary (Control Investments in which MSC Income Fund owns greater than 50% of the voting securities) in an annual report and (2) summarized financial information of a Control Investment in a quarterly report, respectively, if certain thresholds of the investment or income tests are exceeded and the unconsolidated portfolio company qualifies as a significant subsidiary.

As of June 30, 2023 and December 31, 2022, MSC Income Fund had no single investment that qualified as a significant subsidiary under either the investment or income tests.

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

NOTE D — DEBT

Summary of debt as of June 30, 2023 is as follows:


	Outstanding Balance		Unamortized Debt Issuance Costs (1)		Recorded Value		Estimated Fair Value (2)
	(dollars in thousands)

JPM SPV Facility	$	252,688	$	—	$	252,688	$	252,688

Series A Notes	150,000		(994)		149,006		137,802
TIAA Credit Facility	85,000		—		85,000		85,000
Total Debt	$	487,688	$	(994)	$	486,694	$	475,490

_________________

(1)The unamortized debt issuance costs for the Credit Facilities are reflected as Deferred financing costs on the Consolidated Balance Sheets, while the deferred debt issuance costs related to the Series A Notes are reflected as contra liabilities to the Series A Notes on the Consolidated Balance Sheets.

(2)Estimated fair value for outstanding debt if MSC Income Fund had adopted the fair value option under ASC 825. See discussion of the methods used to estimate the fair value of MSC Income Fund’s debt in Note B.9. — Summary of Significant Accounting Policies — Fair Value of Financial Instruments.

Summary of debt as of December 31, 2022 is as follows:


	Outstanding Balance		Unamortized Debt Issuance Costs (1)		Recorded Value		Estimated Fair Value (2)
	(dollars in thousands)

JPM SPV Facility	$	223,688	$	—	$	223,688	$	223,688

Series A Notes	150,000		(1,144)		148,856		132,955
TIAA Credit Facility	98,000		—		98,000		98,000
Total Debt	$	471,688	$	(1,144)	$	470,544	$	454,643

___________________

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Summarized interest expense for the three and six months ended June 30, 2023 and 2022 is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(dollars in thousands)
JPM SPV Facility	$	5,376	$	2,881	$	10,194	$	5,274
Series A Notes	1,590		1,584		3,179		3,004
TIAA Credit Facility	1,896		834		3,823		1,549


Total Interest Expense	$	8,862	$	5,299	$	17,196	$	9,827

TIAA Credit Facility

MSC Income Fund is a party to a senior secured revolving credit agreement dated March 6, 2017 (as amended, the “TIAA Credit Facility”) with TIAA, FSB (“TIAA Bank”), as administrative agent, and with TIAA Bank and other financial institutions as lenders. As of June 30, 2023, the TIAA Credit Facility included (i) total commitments of $165.0 million, (ii) an accordion feature with the right to request an increase in commitments under the facility from new and existing lenders on the same terms and conditions as the existing commitments up to $200.0 million of total commitments and (iii) a revolving period and maturity date to September 1, 2025 and March 1, 2026, respectively, with two, one-year extension options subject to lender approval.

Borrowings under the TIAA Credit Facility bear interest, subject to MSC Income Fund’s election, on a per annum basis at a rate equal to (i) SOFR plus 2.50% or (ii) the base rate plus 1.40%. The base rate is defined as the higher of (a) the Prime rate, (b) the Federal Funds Rate (as defined in the credit agreement) plus 0.5% or (c) SOFR plus 1.1%. Additionally, MSC Income Fund pays an annual unused commitment fee of 0.30% per annum on the unused lender commitments if more than 50% or more of the lender commitments are being used and an annual unused commitment fee of 0.625% per annum on the unused lender commitments if less than 50% of the lender commitments are being used. Borrowings under the TIAA Credit Facility are secured by a fired lien on all of the assets of MSIF and its subsidiaries, other than the assets of Structured Subsidiaries or immaterial subsidiaries, as well as all of the assets, and a pledge of equity ownership interests, of any future subsidiaries of MSIF (other than Structured Subsidiaries or immaterial subsidiaries). In connection with the TIAA Credit Facility, MSIF has made customary representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities. Effective April 27, 2023, the reference rate changed from LIBOR to SOFR plus an applicable credit spread adjustment of 0.10%.

As of June 30, 2023, the interest rate on the TIAA Credit Facility was 7.66%. The average interest rate for borrowings under the TIAA Credit Facility was 7.47% and 3.17% per annum for the three months ended June 30, 2023 and 2022, respectively, and 7.20% and 2.86% per annum for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, MSC Income Fund was in compliance with all financial covenants of the TIAA Credit Facility.

JPM SPV Facility

On February 3, 2021, MSIF Funding LLC (“MSIF Funding”), a wholly-owned Structured Subsidiary that primarily holds originated loan investments, entered into a senior secured revolving credit facility (as amended from time to time, the “JPM SPV Facility” and, together with the TIAA Credit Facility, the “Credit Facilities”) by and among JPMorgan Chase Bank, National Association (“JPM”), as administrative agent, and U.S. Bank, N.A., as collateral agent and collateral administrator and MSIF as portfolio manager. The revolving period under the JPM SPV Facility expires on February 3, 2024 and the JPM SPV Facility is scheduled to mature on February 3, 2025. Advances under the JPM SPV Facility bear interest at a per annum rate equal to the three month SOFR in effect, plus the applicable margin of 3.00% per annum. MSIF Funding also pays a commitment fee of 0.75% per annum on the average daily unused amount of the financing commitments until the third anniversary of the JPM SPV Facility. As of June 30, 2023, the JPM SPV Facility included total commitments of $325.0 million and an accordion feature, with the right to request an increase of total commitments and borrowing availability up to $450.0 million. The JPM SPV Facility is secured by a collateral loan on the assets of MSIF Funding. In connection with the JPM SPV Facility, MSIF Funding has made customary representations and

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warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.

As of June 30, 2023, the interest rate on the JPM SPV Facility was 8.29%. The average interest rate for borrowings under the JPM SPV Facility was 8.06% and 3.88% per annum for the three months ended June 30, 2023 and 2022, respectively, and 7.86% and 3.50% per annum for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, MSC Income Fund was in compliance with all financial covenants of the JPM SPV Facility.

Series A Notes

Pursuant to a Master Note Purchase Agreement dated October 21, 2021 (the “Note Purchase Agreement”), MSC Income Fund issued $77.5 million of 4.04% Series A Senior Notes due 2026 (the “Series A Notes”) upon entering into the Note Purchase Agreement and an additional $72.5 million on January 21, 2022. The Series A Notes bear a fixed interest rate of 4.04% per year and will mature on October 30, 2026, unless redeemed, purchased or prepaid prior to such date by the Company in accordance with their terms.

Interest on the Series A Notes is due semiannually on April 30 and October 30 each year, beginning on April 30, 2022. The Series A Notes may be redeemed in whole or in part at any time or from time to time at MSC Income Fund’s option at par plus accrued interest to the prepayment date and, if applicable, a make-whole premium. In addition, MSC Income Fund is obligated to offer to prepay the Series A Notes at par plus accrued and unpaid interest up to, but excluding, the date of prepayment, if certain change in control events occur. In the event that a Below Investment Grade Event (as defined in the Note Purchase Agreement) occurs, the Series A Notes will bear interest at a fixed rate of 5.04% per year from the date of the occurrence of the Below Investment Grade Event to and until the date on which the Below Investment Grade Event ends. The Series A Notes are general unsecured obligations of MSIF that rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by MSIF.

The Note Purchase Agreement also contains customary events of default with customary cure and notice periods, including, without limitation, nonpayment, incorrect representation in any material respect, breach of covenant, cross-default under other indebtedness of MSIF or subsidiary guarantors subject to a cure pass-through, certain judgments and orders and certain events of bankruptcy. As of June 30, 2023, MSC Income Fund was in compliance with all financial covenants of the Note Purchase Agreement.

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NOTE E — FINANCIAL HIGHLIGHTS

The following is a schedule of financial highlights of MSC Income Fund for the six months ended June 30, 2023 and 2022:


	Six Months Ended June 30,
Per Share Data:	2023		2022
NAV at the beginning of the period	$	7.61	$	7.68
Net investment income(1)	0.36		0.32
Net realized gain (loss)(1)(2)	(0.32)		0.01
Net unrealized appreciation (depreciation)(1)(2)	0.39		(0.09)
Income tax provision(1)(2)	(0.04)		(0.01)
Net increase in net assets resulting from operations(1)	0.39		0.23
Dividends paid from net investment income	(0.35)		(0.32)
Dividends paid from capital gains	—		(0.01)
Dividends paid or accrued(3)	(0.35)		(0.33)


Accretive effect of stock repurchases (repurchasing shares below NAV)(4)	0.01		—
Other(5)	0.01		—
NAV at the end of the period	$	7.67	$	7.58
Shares outstanding at the end of the period	80,049,691		80,011,721

________________

(1)Based on weighted-average number of common shares outstanding for the period.

(2)Net realized gains or losses, net unrealized appreciation or depreciation, and income taxes can fluctuate significantly from period to period.

(3)Represents stockholder dividends paid or accrued for the period.

(4)Shares repurchased in connection with the Modified Dutch Auction Tender Offer. See Note G — Share Repurchases for additional information.

(5)Includes the impact of the different share amounts as a result of calculating certain per share data based on the weighted-average basic shares outstanding during the period and certain per share data based on the shares outstanding as of a period end or transaction date.

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(Unaudited)


	Six Months Ended June 30,
	2023			2022
	(dollars in thousands)
NAV at end of period	$	613,783		$	606,859
Average NAV	$	610,582		$	612,219
Average outstanding debt	$	474,188		$	489,188

Ratios to average NAV:
Ratio of total expenses, including income tax expense, to average NAV(1)(2)(3)(5)	6.38		%	3.81		%
Ratio of operating expenses to average NAV(2)(3)(5)	5.86		%	3.62		%
Ratio of operating expenses, excluding interest expense, to average NAV(2)(3)(5)	3.04		%	2.01		%
Ratio of operating expenses, excluding interest expense and incentive fees, to average NAV(2)(3)(5)	2.01		%	2.01		%
Ratio of net investment income to average NAV(2)(5)	4.67		%	4.18		%
Portfolio turnover ratio(2)	9.95		%	6.79		%
Total return based on change in NAV(2)(4)(5)	5.16		%	2.94		%

_______________

(1)Total expenses are the sum of operating expenses and net income tax provision or benefit. Net income tax provision or benefit includes the accrual of net deferred tax provision or benefit relating to the net unrealized appreciation or depreciation on portfolio investments held in the Taxable Subsidiaries and due to the change in the loss carryforwards, which are non-cash in nature and may vary significantly from period to period. MSC Income Fund is required to include net deferred tax provision or benefit in calculating its total expenses even though these net deferred taxes are not currently payable or receivable.

(2)Not annualized.

(3)Unless otherwise noted, operating expenses include interest, incentive fees, management fees and general and administrative expenses.

(4)Total return is calculated based on the change in NAV per share and stockholder distributions declared per share during the reporting period, divided by the NAV per share at the beginning of the period. The total return does not reflect the sales load from the sale of MSC Income Fund’s common stock.

(5)Net of expense waivers of $4.3 million and $2.2 million for the six months ended June 30, 2023 and June 30, 2022, respectively. Excluding these expense waivers, the expense and income ratios are as follows:


	Six Months Ended June 30,
	2023		2022

Ratio of total expenses, including income tax expense, to average NAV(1)(2)(3)	7.10	%	4.16	%
Ratio of operating expenses to average NAV(2)(3)	6.57	%	3.97	%
Ratio of operating expenses, excluding interest expense, to average NAV(2)(3)	3.75	%	2.37	%
Ratio of operating expenses, excluding interest expense and incentive fees, to average NAV(2)(3)	2.71	%	2.37	%
Ratio of net investment income to average NAV(2)	3.98	%	3.82	%
Total return based on change in NAV(2)(4)	4.46	%	2.59	%

________________

See footnotes (1), (2), (3) and (4) immediately prior to this table.

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NOTE F — DIVIDENDS, DISTRIBUTIONS AND TAXABLE INCOME

MSC Income Fund currently pays quarterly dividends to its stockholders. Future quarterly dividends, if any, will be determined by its Board of Directors on a quarterly basis. MSC Income Fund paid or accrued dividends to its common stockholders of $14.0 million, or $0.175 per share, during the three months ended June 30, 2023, and $28.0 million, or $0.35 per share, during the six months ended June 30, 2023, compared to $12.8 million, or $0.16 per share, during the three months ended June 30, 2022, and $26.0 million, or $0.325 per share, during the six months ended June 30, 2022.

MSIF has elected to be treated for U.S. federal income tax purposes as a RIC. MSIF’s taxable income includes the taxable income generated by MSIF and certain of its subsidiaries, including the Structured Subsidiaries, which are treated as disregarded entities for tax purposes. As a RIC, MSIF generally will not pay corporate-level U.S. federal income taxes on any net ordinary taxable income or capital gains that MSIF distributes to its stockholders. MSIF must generally distribute at least 90% of its “investment company taxable income” (which is generally its net ordinary taxable income and realized net short-term capital gains in excess of realized net long-term capital losses) and 90% of its tax-exempt income to maintain its RIC status (pass-through tax treatment for amounts distributed). As part of maintaining RIC status, undistributed taxable income (subject to a 4% non-deductible U.S. federal excise tax) pertaining to a given fiscal year may be distributed up to twelve months subsequent to the end of that fiscal year, provided such dividends are declared on or prior to the later of (i) filing of the U.S. federal income tax return for the applicable fiscal year or (ii) the fifteenth day of the ninth month following the close of the year in which such taxable income was generated.

The determination of the tax attributes for MSC Income Fund’s distributions is made annually, based upon its taxable income for the full year and distributions paid for the full year. Therefore, a determination made on an interim basis may not be representative of the actual tax attributes of distributions for a full year. Ordinary dividend distributions from a RIC do not qualify for the 20% maximum tax rate (plus a 3.8% Medicare surtax, if applicable) on dividend income from domestic corporations and qualified foreign corporations, except to the extent that the RIC received the income in the form of qualifying dividends from domestic corporations and qualified foreign corporations. The tax attributes for distributions will generally include both ordinary income and qualified dividends, but may also include either one or both of capital gains and return of capital.

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(Unaudited)

Listed below is a reconciliation of “Net increase in net assets resulting from operations” to taxable income and to total distributions declared to common stockholders for the six months ended June 30, 2023 and 2022.


	Six Months Ended June 30,
	2023		2022
	(estimated, dollars in thousands)

Net increase in net assets resulting from operations	$	31,486	$	18,038
Net unrealized (appreciation) depreciation	(31,618)		7,017
Income tax provision	3,217		1,159
Pre-tax book (income) loss not consolidated for tax purposes	1,149		(2,366)
Book income and tax income differences, including debt origination, structuring fees, dividends, realized gains and changes in estimates	20,083		(536)
Estimated taxable income (1)	24,317		23,312
Taxable income earned in prior year and carried forward for distribution in current year	20,674		23,276
Taxable income earned prior to period end and carried forward for distribution next period	(30,965)		(33,410)
Dividend accrued as of period end and paid in the following period	14,009		12,802
Taxable income earned to be carried forward	(16,956)		(20,608)
Total distributions accrued or paid to common stockholders	$	28,035	$	25,980

________________

(1)MSIF’s taxable income for each period is an estimate and will not be finally determined until MSIF files its tax return for each year. Therefore, the final taxable income, and the taxable income earned in each period and carried forward for distribution in the following period, may be different than this estimate.

The Taxable Subsidiaries primarily hold certain equity investments for MSC Income Fund. The Taxable Subsidiaries permit MSC Income Fund to hold equity investments in portfolio companies which are “pass-through” entities for tax purposes and to continue to comply with the “source-of-income” requirements contained in the RIC tax provisions of the Code. The Taxable Subsidiaries are consolidated with MSIF for U.S. GAAP financial reporting purposes, and the portfolio investments held by the Taxable Subsidiaries are included in MSC Income Fund’s consolidated financial statements as portfolio investments and recorded at fair value. The Taxable Subsidiaries are not consolidated with MSIF for income tax purposes and may generate income tax expense, or benefit, and tax assets and liabilities, as a result of their ownership of certain portfolio investments. The taxable income, or loss, of the Taxable Subsidiaries may differ from their book income, or loss, due to temporary book and tax timing differences and permanent differences. The Taxable Subsidiaries are each taxed at corporate income tax rates based on their taxable income. The income tax expense, or benefit, if any, and the related tax assets and liabilities, of the Taxable Subsidiaries are reflected in MSC Income Fund’s consolidated financial statements.

The income tax expense for MSC Income Fund is generally composed of (i) deferred tax expense, which is primarily the result of the net activity relating to the portfolio investments held in the Taxable Subsidiaries, including changes in loss carryforwards, changes in net unrealized appreciation or depreciation, changes in valuation allowance and other temporary book tax differences, and (ii) current tax expense, which is primarily the result of current U.S. federal income and state taxes and excise taxes on MSC Income Fund’s estimated undistributed taxable income. The income tax expense, or benefit, and the related tax assets and liabilities generated by the Taxable Subsidiaries, if any, are reflected in MSC Income Fund’s Consolidated Statements of Operations. MSC Income Fund’s provision for income taxes was comprised of the following for the three and six months ended June 30, 2023 and 2022:

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(dollars in thousands)
Current tax expense:
Federal	$	32	$	(5)	$	55	$	3
State	58		168		228		315
Excise	124		475		241		663
Total current tax expense	214		638		524		981
Deferred tax expense:
Federal	1,600		53		2,241		168
State	233		4		452		10
Total deferred tax expense	1,833		57		2,693		178

Total income tax provision	$	2,047	$	695	$	3,217	$	1,159

The net deferred tax liability at June 30, 2023 and December 31, 2022 was $3.1 million and $0.4 million, respectively, with the change primarily related to changes in net unrealized appreciation or depreciation, changes in loss carryforwards and other temporary book-tax differences relating to portfolio investments held by the Taxable Subsidiaries.

At June 30, 2023, for U.S. federal income tax purposes, the Taxable Subsidiaries had net operating loss carryforwards generated in 2020 and future periods that are not subject to expiration. The net operating losses will carryforward indefinitely until utilized. The net capital loss carryforwards of MSC Income Fund, if not utilized, will expire in various taxable years 2023 through 2027. Additionally, the Taxable Subsidiaries have interest expense limitation carryforwards which have an indefinite carryforward period.

NOTE G — SHARE REPURCHASES

Due to the impacts of the COVID-19 pandemic, MSC Income Fund’s Board of Directors determined that it was in the best interest of the Company to suspend its share repurchase program from March 31, 2020 to March 8, 2021 in order to preserve financial flexibility and liquidity. On March 8, 2021, MSC Income Fund announced that the Board of Directors approved the reinstatement of the share repurchase program.

Under the terms of the reinstated share repurchase program, MSC Income Fund offers to purchase shares at the NAV per share on the repurchase date. The amount of shares of MSC Income Fund’s common stock to be repurchased during any calendar quarter may be equal to the lesser of (i) the number of shares of common stock MSC Income Fund could repurchase with the proceeds it received from the issuance of common stock under MSC Income Fund’s dividend reinvestment plan or (ii) 2.5% of the weighted-average number of shares of common stock outstanding in the prior four calendar quarters. Upon resuming making offers to repurchase shares pursuant to the share repurchase program in April 2021, MSC Income Fund has limited repurchase offers to the number of shares of common stock it can repurchase with 90% of the cash retained as a result of issuances of common stock under MSC Income Fund’s dividend reinvestment plan. At the discretion of the Board of Directors, MSC Income Fund may also use cash on hand, cash available from borrowings and cash from the sale of investments as of the end of the applicable period to repurchase shares. MSC Income Fund’s Board of Directors may amend, suspend or terminate the share repurchase program upon 30 days’ notice.

On May 15, 2023, MSC Income Fund commenced a modified “Dutch Auction” tender offer (the “Modified Dutch Auction Tender Offer”) to purchase for cash, for an aggregate purchase price of not more than $2.0 million in value of its shares of common stock subject to the conditions described in the Offer to Purchase, dated May 15, 2023 which expired on June 13, 2023. Pursuant to the Modified Dutch Auction Tender Offer, MSC Income Fund repurchased 406,904 shares, representing 0.5% of its then outstanding shares, on June 21, 2023 at a price of $5.50 per share for an aggregate cost of $2.2 million, excluding fees and expenses related to the Modified Dutch Auction Tender Offer. MSC Income Fund used available cash to fund the purchases of its shares of common stock in the Modified Dutch Auction Tender Offer and to pay for all related fees and expenses. In accordance with rules promulgated by the SEC, MSC Income Fund had the option to

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

increase the number of shares accepted for payment in the Modified Dutch Auction Tender Offer by up to 2.0% of its outstanding shares without amending or extending the Modified Dutch Auction Tender Offer. MSC Income Fund exercised that option and increased the Modified Dutch Auction Tender Offer by $0.2 million to avoid any proration for the stockholders tendering shares at or below the clearing price. These shares are included in the total shares purchased noted above.

Since inception of its share repurchase program, MSC Income Fund has funded the repurchase of $139.5 million in shares of common stock, including the shares repurchased under the Modified Dutch Auction Tender Offer, as of June 30, 2023. For the three months ended June 30, 2023 and 2022, MSC Income Fund funded $6.5 million and $4.5 million, respectively, for shares of its common stock tendered for repurchase under the plan and the Modified Dutch Auction Tender Offer. For the six months ended June 30, 2023 and 2022, MSC Income Fund funded $10.5 million and $8.0 million, respectively, for shares of its common stock tendered for repurchase under the plan and the Modified Dutch Auction Tender Offer.

NOTE H — DIVIDEND REINVESTMENT PLAN

MSC Income Fund’s dividend reinvestment plan (the “DRIP”) provides for the reinvestment of dividends on behalf of stockholders. As a result, if MSC Income Fund declares a cash dividend, stockholders who have “opted in” to the DRIP will have their cash dividend automatically reinvested into additional shares of MSC Income Fund common stock. The number of shares of common stock to be issued to a stockholder under the DRIP shall be determined by dividing the total dollar amount of the distribution payable to such stockholder by a price per share of common stock determined by MSC Income Fund’s Board of Directors or a committee thereof, in its sole discretion, that is (i) not less than the NAV per share of common stock determined in good faith by the Board of Directors or a committee thereof, in its sole discretion, within 48 hours prior to the payment of the distribution and (ii) not more than 2.5% greater than the NAV per share as of such date.

Summarized DRIP information for the six months ended June 30, 2023 and 2022 is as follows:


	Six Months Ended June 30,
	2023		2022
	(dollars in thousands)
DRIP participation	$	9,174	$	8,825
Shares issued for DRIP	1,172,995		1,115,515

NOTE I — COMMITMENTS AND CONTINGENCIES

At June 30, 2023, the Company had the following outstanding commitments (in thousands):


Investments with equity capital commitments that have not yet funded:	Amount

Freeport First Lien Loan Fund III LP	$	6,733
HPEP 3, L.P.	1,555
Brightwood Capital Fund III, LP	100

Total Equity Commitments	$	8,388

Investments with commitments to fund revolving loans that have not been fully drawn or term loans with additional commitments not yet funded:

Power System Solutions	$	3,989
AB Centers Acquisition Corporation	3,897

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)


HEADLANDS OP-CO LLC						3,000
Winter Services LLC						2,778
SI East, LLC						2,500
Bluestem Brands, Inc.						2,165
Roof Opco, LLC						1,944
NWN Corporation						1,744
American Health Staffing Group, Inc.						1,667
IG Parent Corporation						1,667
Imaging Business Machines, L.L.C.						1,483
Mako Steel, LP						1,420
Infolinks Media Buyco, LLC						1,260
RA Outdoors LLC						1,235
Bettercloud, Inc.						1,216
Dalton US Inc.						1,187
ArborWorks, LLC						1,130
Burning Glass Intermediate Holding Company, Inc.						1,033
GRT Rubber Technologies LLC						1,010
IG Investor, LLC						1,000
NexRev LLC						1,000
Bond Brand Loyalty ULC						900
Classic H&G Holdco, LLC						860
CaseWorthy, Inc.						800
VVS Holdco, LLC						800
Cody Pools, Inc.						786
NinjaTrader, LLC						750
Direct Marketing Solutions, Inc.						750
Evergreen North America Acquisitions, LLC						710
JTI Electrical & Mechanical, LLC						702
SPAU Holdings, LLC						700
West Star Aviation Acquisition, LLC						667
Engineering Research & Consulting, LLC						621
Centre Technologies Holdings, LLC						600
ITA Holdings Group, LLC						543
Paragon Healthcare, Inc.						543
Watterson Brands, LLC						534
Robbins Bros. Jewelry, Inc.						500
Wall Street Prep, Inc.						500
Inspire Aesthetics Management, LLC						475
Jackmont Hospitality, Inc.						473
PTL US Bidco, Inc						469
MonitorUS Holding, LLC						467
Xenon Arc, Inc.						465
Invincible Boat Company, LLC.						457
Microbe Formulas, LLC						434
Acumera, Inc.						427
Trantech Radiator Topco, LLC						400
Chamberlin Holding LLC						400
AMEREQUIP LLC.						391
South Coast Terminals Holdings, LLC						381
Escalent, Inc.						349

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)


AVEX Aviation Holdings, LLC	307
Batjer TopCo, LLC	300
Gamber-Johnson Holdings, LLC	300
Archer Systems, LLC	232
Channel Partners Intermediateco, LLC	209
MetalForming AcquireCo, LLC	205
SIB Holdings, LLC	200
Mystic Logistics Holdings, LLC	200
Johnson Downie Opco, LLC	200
Orttech Holdings, LLC	200
ATS Operating, LLC	150
Career Team Holdings, LLC	150
Elgin AcquireCo, LLC	123
Gulf Publishing Holdings, LLC	100
Clad-Rex Steel, LLC	100
Adams Publishing Group, LLC	94
Hawk Ridge Systems, LLC	84
AAC Holdings, Inc.	71
Interface Security Systems, L.L.C	1

Total Loan Commitments	$	59,405

Total Commitments	$	67,793

MSC Income Fund will fund its unfunded commitments from the same sources it uses to fund its investment commitments that are funded at the time they are made (which are typically through existing cash and cash equivalents and borrowings under the Credit Facilities). MSC Income Fund follows a process to manage its liquidity and ensure that it has available capital to fund its unfunded commitments as necessary. MSC Income Fund had no unrealized appreciation or depreciation on the outstanding unfunded commitments as of June 30, 2023.

MSC Income Fund may, from time to time, be involved in litigation arising out of its operations in the normal course of business or otherwise. Furthermore, third parties may try to impose liability on MSC Income Fund in connection with the activities of its portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, MSC Income Fund does not expect any current matters will materially affect its financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on MSC Income Fund’s financial condition or results of operations in any future reporting period.

NOTE J — RELATED PARTY TRANSACTIONS

1.Advisory Agreements and Conditional Expense Reimbursement Waivers

On October 30, 2020, MSC Income Fund entered into the Investment Advisory Agreement with the Adviser, which states that the Adviser will oversee the management of MSC Income Fund’s activities and is responsible for making investment decisions with respect to, and providing day‑to‑day management and administration of, MSC Income Fund’s Investment Portfolio. The Investment Advisory Agreement was most recently re-approved by the Board of Directors, including a majority of members whom are not “interested” persons (as defined by the 1940 Act) of MSC Income Fund or the Adviser, on August 10, 2023.

Pursuant to the Investment Advisory Agreement, MSC Income Fund pays the Adviser a base management fee and incentive fees as compensation for the services described above. The base management fee is calculated at an annual rate of 1.75% of MSC Income Fund’s average gross assets. The term “gross assets” means total assets of MSC Income Fund as disclosed on MSC Income Fund’s Consolidated Balance Sheets. “Average gross assets” are calculated based on MSC

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Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

Income Fund’s gross assets at the end of the two most recently completed calendar quarters. The base management fee is payable quarterly in arrears. The base management fee is expensed as incurred.

The incentive fee under the Investment Advisory Agreement consists of two parts. The first part, referred to as the subordinated incentive fee on income, is calculated and payable quarterly in arrears based on Pre-Incentive Fee Net Investment Income (as defined below) for the immediately preceding quarter. The subordinated incentive fee on income is equal to 20.0% of MSC Income Fund’s Pre-Incentive Fee Net Investment Income for the immediately preceding quarter, expressed as a quarterly rate of return on adjusted capital at the beginning of the most recently completed calendar quarter, exceeding 1.875% (or 7.5% annualized), subject to a “catch up” feature (as described below).

For this purpose, Pre-Incentive Fee Net Investment Income means interest income, dividend income and any other income (including any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that MSC Income Fund receives from portfolio companies) accrued during the calendar quarter, minus MSC Income Fund’s operating expenses for the quarter (including the management fee, expenses payable under any proposed administration agreement and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding taxes and the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as original issue discount debt instruments and PIK interest and zero coupon securities), accrued income that MSC Income Fund has not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. For purposes of this fee, adjusted capital means cumulative gross proceeds generated from sales of MSC Income Fund’s common stock (including proceeds from MSC Income Fund’s DRIP) reduced for non-liquidating distributions, other than distributions of profits, paid to MSC Income Fund’s stockholders and amounts paid for share repurchases pursuant to MSC Income Fund’s share repurchase program. The subordinated incentive fee on income is expensed in the quarter in which it is incurred.

The calculation of the subordinated incentive fee on income for each quarter is as follows:

•No subordinated incentive fee on income shall be payable to the Adviser in any calendar quarter in which MSC Income Fund’s Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate of 1.875% (or 7.5% annualized) on adjusted capital;

•100% of MSC Income Fund’s Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than or equal to 2.34375% in any calendar quarter (9.375% annualized) shall be payable to the Adviser. This portion of the subordinated incentive fee on income is referred to as the “catch up” and is intended to provide the Adviser with an incentive fee of 20.0% on all of MSC Income Fund’s Pre-Incentive Fee Net Investment Income as if the hurdle rate did not apply when the Pre-Incentive Fee Net Investment Income exceeds 2.34375% (9.375% annualized) in any calendar quarter; and

•For any quarter in which MSC Income Fund’s Pre-Incentive Fee Net Investment Income exceeds 2.34375% (9.375% annualized), the subordinated incentive fee on income shall equal 20.0% of the amount of MSC Income Fund’s Pre-Incentive Fee Net Investment Income, as the hurdle rate and catch-up will have been achieved.

The second part of the incentive fee, referred to as the incentive fee on capital gains, is an incentive fee on realized capital gains earned from the portfolio of MSC Income Fund and is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement). This fee equals 20.0% of MSC Income Fund’s incentive fee capital gains, which equals MSC Income Fund’s realized capital gains on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. At the end of each reporting period, MSC Income Fund estimates the incentive fee on capital gains and accrues the fee based on a hypothetical liquidation of its portfolio. Therefore, the accrual includes both net realized gains and net unrealized gains (the net unrealized difference between the fair value and the par value of its portfolio), if any. The incentive fee accrued pertaining to the unrealized gain is neither earned nor payable to the Adviser until such time it is realized.

Table of contents

MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

For the three months ended June 30, 2023 and 2022, MSC Income Fund incurred base management fees of $4.9 million and $5.0 million, respectively. For the three months ended June 30, 2023, MSC Income Fund incurred subordinated incentive fees on income of $3.6 million. MSC Income Fund did not incur any subordinated incentive fees on income or capital gains incentive fees for the three months ended June 30, 2022. For the six months ended June 30, 2023 and 2022, MSC Income Fund incurred base management fees of $9.8 million and $9.9 million, respectively. For the six months ended June 30, 2023, MSC Income Fund incurred subordinated incentive fees on income of $6.3 million and no capital gains incentive fees. MSC Income Fund did not incur any subordinated incentive fees on income or capital gains incentive fees for the six months ended June 30, 2022.

Pursuant to the Investment Advisory Agreement, MSC Income Fund is required to pay or reimburse the Adviser for administrative services expenses, which include all costs and expenses related to MSC Income Fund’s day-to-day administration and management not related to advisory services, whether such administrative services were performed by a third-party service provider or the Adviser or its affiliates (to the extent performed by the Adviser or its affiliates, the “Internal Administrative Services”). Internal Administrative Services include, but are not limited to, the cost of an Adviser’s personnel performing accounting and compliance functions and other administrative services on behalf of MSC Income Fund.

The Adviser waived reimbursement of all Internal Administrative Services expenses from October 30, 2020 through December 31, 2021. On January 1, 2022, the Adviser assumed responsibility of certain administrative services that were previously provided for MSC Income Fund by a third-party sub-administrator. After December 31, 2021, the Adviser continued to waive reimbursement of all Internal Administrative Services expenses, except for the cost of the services previously provided by the sub-administrator. For the three months ended June 30, 2023 and 2022, MSC Income Fund incurred Internal Administrative Services expenses before expense waivers of $2.5 million and $1.3 million, respectively. For the three months ended June 30, 2023 and 2022, the Adviser waived the reimbursements of Internal Administrative Services expenses of $2.4 million and $1.1 million, respectively. For the six months ended June 30, 2023 and 2022, MSC Income Fund incurred Internal Administrative Services expenses of $4.6 million and $2.5 million, respectively. For the six months ended June 30, 2023 and 2022, the Adviser waived the reimbursements of Internal Administrative Services expenses of $4.3 million and $2.2 million, respectively. Waived Internal Administrative Services expenses are permanently waived and are not subject to future reimbursement.

2.Offering Costs

In accordance with MSC Income Fund’s previous investment advisory agreement with the previous investment adviser (“HMS Adviser”), MSC Income Fund reimbursed HMS Adviser for any offering costs that were paid on MSC Income Fund’s behalf, which consisted of, among other costs, actual legal, accounting, bona fide out-of-pocket itemized and detailed due diligence costs, printing, filing fees, transfer agent costs, postage, escrow fees, advertising and sales literature and other costs incurred in connection with the offering of MSC Income Fund’s common stock, including through MSC Income Fund’s DRIP. HMS Adviser was responsible for the payment of offering costs to the extent they exceeded 1.5% of the aggregate gross stock offering proceeds. Pursuant to the transaction whereby the Adviser became the investment adviser to MSC Income Fund, HMS Adviser agreed to permanently waive reimbursement of organizational and offering expenses except for $0.6 million which remained payable to HMS Adviser and would be reimbursed as part of future issuances of common stock by MSC Income Fund. For the three months ended June 30, 2023 and June 30, 2022, MSC Income Fund reimbursed HMS Adviser $0.06 million and $0.08 million, respectively, in connection with stock issuances. For the six months ended June 30, 2023 and June 30, 2022, the Company reimbursed HMS Adviser $0.13 million and $0.14 million, respectively, in connection with stock issuances. As of June 30, 2023, MSC Income Fund’s reimbursement obligation to HMS Adviser for organizational and offering expenses was fully repaid.

3.Indemnification

The Investment Advisory Agreement provides that the Adviser and its officers, directors, controlling persons and any other person or entity affiliated with it acting as MSC Income Fund’s agent are entitled to indemnification (including reasonable attorneys’ fees and amounts reasonably paid in settlement) for any liability or loss suffered by such indemnitee, and such indemnitee will be held harmless for any loss or liability suffered by MSC Income Fund, if (i) the indemnitee has determined, in good faith, that the course of conduct which caused the loss or liability was in MSC Income Fund’s best

Table of contents

MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

interests, (ii) the indemnitee was acting on behalf of or performing services for MSC Income Fund, (iii) the liability or loss suffered was not the result of negligence, willful malfeasance, bad faith or misconduct by the indemnitee or an affiliate thereof acting as MSC Income Fund’s agent and (iv) the indemnification or agreement to hold the indemnitee harmless is only recoverable out of MSC Income Fund’s net assets and not from MSC Income Fund’s stockholders.

4.Co-Investment

In the ordinary course of business, MSC Income Fund enters into transactions with other parties that may be considered related party transactions. MSC Income Fund has implemented certain policies and procedures, both written and unwritten, to ensure that it does not engage in any prohibited transactions with any persons affiliated with MSC Income Fund. If such affiliations are found to exist, MSC Income Fund seeks the Board of Directors and/or appropriate Board of Directors committee review and approval for such transactions and otherwise comply with, or seek, orders for exemptive relief from the SEC, as appropriate.

MSC Income Fund has received an exemptive order from the SEC permitting co-investments among MSC Income Fund, Main Street and other funds and clients advised by the Adviser in certain negotiated transactions where co-investing would otherwise be prohibited under the 1940 Act. MSC Income Fund has made co-investments, and in the future intends to continue to make co-investments with Main Street and other funds and clients advised by the Adviser, in accordance with the conditions of the order. The order requires, among other things, that the Adviser and Main Street consider whether each such investment opportunity is appropriate for MSC Income Fund, Main Street and the other funds and clients advised by the Adviser, as applicable, and if it is appropriate, to propose an allocation of the investment opportunity between such parties. Because the Adviser is wholly-owned by Main Street and is not managing MSC Income Fund’s investment activities as its sole activity, this may provide the Adviser an incentive to allocate opportunities to other participating funds and clients instead of MSC Income Fund. However, the Adviser has policies and procedures in place to manage this conflict, including oversight by the independent members of the Board of Directors. Additional information regarding the operation of the co-investment program is set forth in the order granting exemptive relief, which may be reviewed on the SEC’s website at www.sec.gov. In addition to the co-investment program described above, MSC Income Fund also co-invests in syndicated deals and other transactions where price is the only negotiated point by MSC Income Fund and its affiliates.

5. Other Related Party Transactions

On May 2, 2022, the Company sold 94,697 shares of its common stock to Main Street at $7.92 per share, the price at which the Company issued new shares in connection with reinvestments of the May 2, 2022 dividend pursuant to the dividend reinvestment plan, for total proceeds to the Company of $750,000. The issuance and sale were made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and was unanimously approved by the Company’s Board of Directors, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, of the Company or the Adviser.

On May 1, 2023, the Company sold 255,754 shares of its common stock to Main Street at $7.82 per share, the

price at which the Company issued new shares in connection with reinvestments of the May 1, 2023 dividend pursuant

to the DRIP, for total proceeds to the Company of $2.0 million. The issuance and sale were made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and was unanimously approved by the Board, including each director who is not an “interested person,” as such term is defined in

Section 2(a)(19) of the 1940 Act, of the Company or the Adviser.

NOTE K — SUBSEQUENT EVENTS

On August 1, 2023, the Company sold 348,542 shares of its common stock to Main Street at $7.89 per share, the price at which the Company issued new shares in connection with reinvestments of the August 1, 2023 dividend pursuant to the DRIP, for total proceeds to the Company of $2.8 million. The issuance and sale were made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and was unanimously

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MSC INCOME FUND, INC.

Notes to the Consolidated Financial Statements (Continued)

(Unaudited)

approved by the Board, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, of the Company or the Adviser.

On August 1, 2023, the Company repurchased 545,206 shares of its common stock validly tendered and not withdrawn on the terms set forth in the tender offer statement on Schedule TO and Offer to Purchase filed with the SEC on August 3, 2023. The shares were repurchased at a price of $7.74 per share, which was the Company’s NAV per share as of August 1, 2023, for an aggregate purchase price of $4.2 million (an amount equal to 90% of the proceeds the Company received from the issuance of shares under the Company’s DRIP from the August 1, 2023 dividend payment).

On August 10, 2023, the Board of Directors declared a quarterly cash dividend of $0.175 per share payable November 1, 2023 to stockholders of record as of September 29, 2023. Additionally, the Board approved a repurchase offer pursuant to the Company’s share repurchase program in an amount equal to 90% of the proceeds resulting from shares issued in lieu of cash distributions from the November 1, 2023 dividend payment.

Table of contents Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates

June 30, 2023

(dollars in thousands)

(unaudited)


Company	Total Rate	Base Rate	Spread	PIK Rate	Type of Investment(1)(10)(11)	Geography	Amount of Realized Gain/(Loss)		Amount of Unrealized Gain/(Loss)		Amount of Interest, Fees or Dividends Credited to Income(2)		December 31, 2022 Fair Value		Gross Additions(3)		Gross Reductions(4)		June 30, 2023 Fair Value (13)
Control Investments
GRT Rubber Technologies LLC	11.17%	L+	6.00%		Secured Debt (12)	(8)	$	—	$	1	$	31	$	330	$	310	$	—	$	640
	13.17%	L+	8.00%		Secured Debt	(8)	—		(24)		1,304		19,943		26		25		19,944
					Member Units	(8)	—		—		41		21,890		—		—		21,890
Harris Preston Fund Investments					LP Interests (2717 MH, L.P.)	(8)	1,677		(675)		141		7,552		2,077		3,283		6,346
Copper Trail Fund Investments					LP Interests (CTMH, LP)	(9)	—		—		—		588		—		—		588
Other Amounts related to investments transferred to or from other 1940 Act classification during the period							—		—		—		—		—		—		—
Total Control Investments							$	1,677	$	(698)	$	1,517	$	50,303	$	2,413	$	3,308	$	49,408
Affiliate Investments
AFG Capital Group, LLC					Preferred Member Units	(8)	$	1,800	$	(2,050)	$	—	$	2,350	$	1,800	$	4,150	$	—
Analytical Systems Keco Holdings, LLC		L+	10.00%		Secured Debt	(8)	—		—		—		(2)		—		—		(2)
	15.25%	L+	10.00%		Secured Debt	(8)	—		—		95		1,135		10		35		1,110
	14.13%				Preferred Member Units	(8)	—		—		—		—		—		—		—
					Preferred Member Units	(8)	—		140		—		880		140		—		1,020
					Warrants	(8)	—		—		—		—		—		—		—
ATX Networks Corp.		L+	7.50%		Secured Debt	(6)	—		(102)		856		6,368		545		6,913		—
					Unsecured Debt	(6)	—		(276)		1,135		2,614		1,135		3,749		—
					Common Stock	(6)	3,178		(3,290)		—		3,290		3,178		6,468		—
Barfly Ventures, LLC					Member Units	(5)	—		(93)		—		1,107		—		94		1,013
Batjer TopCo, LLC					Secured Debt (12)	(8)	—		1		—		(1)		1		—		—
	10.00%				Secured Debt	(8)	—		17		66		1,205		20		50		1,175
					Preferred Stock	(8)	—		225		64		455		225		—		680
Brewer Crane Holdings, LLC	15.17%	L+	10.00%		Secured Debt	(9)	—		(16)		107		1,491		—		78		1,413
					Preferred Member Units	(9)	—		(180)		15		1,770		—		180		1,590
Centre Technologies Holdings, LLC		L+	9.00%		Secured Debt (12)	(8)	—		—		2		—		—		—		—
	14.25%	L+	9.00%		Secured Debt	(8)	—		22		266		3,731		27		—		3,758
					Preferred Member Units	(8)	—		430		15		2,170		430		—		2,600
Chamberlin Holding LLC		SF+	6.00%		Secured Debt (12)	(8)	—		19		1		—		—		—		—
	13.36%	SF+	8.00%		Secured Debt	(8)	—		(4)		275		4,236		4		138		4,102
					Member Units	(8)	—		262		373		5,728		262		—		5,990
					Member Units	(8)	—		30		12		678		30		—		708
Charps, LLC					Preferred Member Units	(5)	—		120		62		3,330		120		—		3,450
Clad-Rex Steel, LLC					Secured Debt (12)	(5)	—		—		—		—		—		—		—
	11.50%				Secured Debt	(5)	—		(21)		151		2,620		—		211		2,409
	10.00%				Secured Debt	(5)	—		—		13		260		—		4		256
					Member Units	(5)	—		(460)		69		2,060		—		460		1,600
					Member Units	(5)	—		55		—		152		130		—		282

Table of contents Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

June 30, 2023

(dollars in thousands)

(unaudited)


Company	Total Rate	Base Rate	Spread	PIK Rate	Type of Investment(1)(10)(11)	Geography	Amount of Realized Gain/(Loss)	Amount of Unrealized Gain/(Loss)	Amount of Interest, Fees or Dividends Credited to Income(2)	December 31, 2022 Fair Value	Gross Additions(3)	Gross Reductions(4)	June 30, 2023 Fair Value (13)
Cody Pools, Inc.					Secured Debt (12)	(8)	—	2	—	—	—	—	—
	12.50%				Secured Debt	(8)	—	28	79	—	7,871	—	7,871
		L+	10.50%		Secured Debt	(8)	—	(11)	26	273	14	287	—
		L+	10.50%		Secured Debt	(8)	—	(96)	500	6,882	—	6,882	—
					Preferred Member Units	(8)	—	1,730	362	14,550	1,730	—	16,280
Colonial Electric Company LLC					Secured Debt	(6)	—	—	12	—	400	400	—
	12.00%				Secured Debt	(6)	—	(77)	362	5,729	17	234	5,512
					Preferred Member Units	(6)	—	360	—	—	600	—	600
					Preferred Member Units	(6)	—	(370)	(295)	2,290	—	370	1,920
Datacom, LLC	7.50%				Secured Debt	(8)	—	—	1	25	64	10	79
	10.00%				Secured Debt	(8)	—	—	59	865	11	14	862
					Preferred Member Units	(8)	—	(40)	—	300	—	40	260
Digital Products Holdings LLC	15.25%	SF+	10.00%		Secured Debt	(5)	—	—	288	3,878	—	195	3,683
					Preferred Member Units	(5)	—	—	25	2,459	—	—	2,459
Direct Marketing Solutions, Inc.					Secured Debt (12)	(9)	—	(1)	3	—	1	1	—
	13.00%				Secured Debt	(9)	—	(11)	372	5,352	11	174	5,189
					Preferred Stock	(9)	—	280	86	5,558	282	—	5,840
Flame King Holdings, LLC		L+	6.50%		Secured Debt	(9)	—	(15)	121	1,900	15	1,915	—
		L+	9.00%		Secured Debt	(9)	—	(123)	478	5,300	123	5,423	—
					Preferred Equity	(9)	—	1,690	513	4,400	1,690	—	6,090
Freeport Financial Funds					LP Interests (Freeport First Lien Loan Fund III LP) (12)	(5)	—	—	291	5,848	—	536	5,312
Gamber-Johnson Holdings, LLC		SF+	8.50%		Secured Debt (12)	(5)	—	—	1	—	—	—	—
	11.00%	SF+	8.00%		Secured Debt	(5)	—	(44)	925	16,020	44	1,144	14,920
					Member Units	(5)	—	4,820	727	12,720	4,820	—	17,540
GFG Group, LLC	9.00%				Secured Debt	(5)	—	(9)	137	2,836	9	9	2,836
					Preferred Member Units	(5)	—	290	26	1,790	290	—	2,080
Gulf Publishing Holdings, LLC		L+	9.50%		Secured Debt (12)	(8)	—	—	—	—	—	—	—
	12.50%				Secured Debt	(8)	—	—	38	571	—	—	571
					Preferred Equity	(8)	—	—	—	950	—	—	950
					Member Units	(8)	—	—	—	—	—	—	—
HPEP 3, L.P.					LP Interests (HPEP 3, L.P.) (12)	(8)	—	283	—	4,331	283	508	4,106
IG Investor, LLC					Secured Debt (12)	(6)	—	—	1	—	170	200	(30)
	13.00%				Secured Debt	(6)	—	—	39	—	9,148	—	9,148
					Common Equity	(6)	—	—	—	—	3,774	—	3,774
Independent Pet Partners Intermediate Holdings, LLC					Common Equity	(6)	—	—	—	—	6,540	—	6,540
Integral Energy Services	13.04%	L+	7.50%		Secured Debt	(8)	—	(265)	1,208	18,425	39	265	18,199
					Common Stock	(8)	—	(530)	13	1,490	—	530	960
Kickhaefer Manufacturing Company, LLC	12.00%				Secured Debt	(5)	—	—	355	5,093	54	—	5,147
	9.00%				Secured Debt	(5)	—	—	44	961	—	5	956
					Preferred Equity	(5)	—	130	—	1,800	130	—	1,930
					Member Units	(5)	—	(18)	15	713	—	18	695
Market Force Information, LLC					Secured Debt	(9)	(6,463)	6,060	—	403	6,060	6,463	—

Table of contents Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

June 30, 2023

(dollars in thousands)

(unaudited)


Company	Total Rate	Base Rate	Spread	PIK Rate	Type of Investment(1)(10)(11)	Geography	Amount of Realized Gain/(Loss)	Amount of Unrealized Gain/(Loss)	Amount of Interest, Fees or Dividends Credited to Income(2)	December 31, 2022 Fair Value	Gross Additions(3)	Gross Reductions(4)	June 30, 2023 Fair Value (13)
					Member Units	(9)	(4,160)	4,160	—	—	4,160	4,160	—
MH Corbin Holding LLC	13.00%				Secured Debt	(5)	—	288	98	1,137	288	49	1,376
					Preferred Member Units	(5)	—	—	—	—	—	—	—
					Preferred Member Units	(5)	—	—	—	—	—	—	—
Mystic Logistics Holdings, LLC					Secured Debt (12)	(6)	—	—	1	—	—	—	—
	10.00%				Secured Debt	(6)	—	—	72	1,436	—	—	1,436
					Common Stock	(6)	—	1,080	494	5,708	1,080	—	6,788
NexRev LLC					Secured Debt (12)	(8)	—	—	—	—	—	—	—
	10.00%				Secured Debt	(8)	—	373	156	2,119	386	413	2,092
					Preferred Member Units	(8)	—	580	38	280	580	—	860
NuStep, LLC	11.75%	L+	6.50%		Secured Debt	(5)	—	(1)	63	1,100	1	1	1,100
	12.00%				Secured Debt	(5)	—	—	280	4,603	3	—	4,606
					Preferred Member Units	(5)	—	90	—	2,010	90	—	2,100
					Preferred Member Units	(5)	—	—	—	1,290	—	—	1,290
Oneliance, LLC	16.25%	L+	11.00%		Secured Debt	(7)	—	(7)	113	1,380	3	27	1,356
					Preferred Stock	(7)	—	—	—	264	18	—	282
Orttech Holdings, LLC		L+	11.00%		Secured Debt (12)	(5)	—	2	—	(2)	2	—	—
	16.25%	L+	11.00%		Secured Debt	(5)	—	72	472	5,814	87	201	5,700
					Preferred Stock	(5)	—	1,200	134	2,940	1,200	—	4,140
Robbins Bros. Jewelry, Inc.					Secured Debt (12)	(9)	—	—	2	(8)	1	—	(7)
	12.50%				Secured Debt	(9)	—	(22)	255	3,902	9	97	3,814
					Preferred Equity	(9)	—	(970)	—	1,650	—	970	680
SI East, LLC					Secured Debt (12)	(7)	—	—	5	—	—	—	—
	12.78%				Secured Debt	(7)	—	179	100	—	18,179	—	18,179
					Secured Debt	(7)	—	(134)	1,403	29,929	—	29,929	—
					Preferred Member Units	(7)	—	608	213	4,550	710	—	5,260
Student Resource Center, LLC	8.50%			8.50%	Secured Debt	(6)	—	—	239	5,063	237	—	5,300
					Preferred Equity	(6)	—	—	—	—	—	—	—
Tedder Industries, LLC	12.00%				Secured Debt	(9)	—	—	28	460	—	—	460
	12.00%				Secured Debt	(9)	—	—	232	3,780	3	—	3,783
					Preferred Member Units	(9)	—	(347)	—	1,920	—	347	1,573
					Preferred Member Units	(9)	—	44	—	—	133	—	133
Trantech Radiator Topco, LLC					Secured Debt (12)	(7)	—	(1)	2	—	1	1	—
	12.00%				Secured Debt	(7)	—	(7)	126	1,980	7	7	1,980
					Common Stock	(7)	—	990	15	1,950	990	—	2,940
Volusion, LLC	10.00%				Secured Debt	(8)	—	—	23	—	900	—	900
					Secured Debt	(8)	(1,366)	780	71	6,392	—	6,392	—
					Unsecured Convertible Debt	(8)	(175)	175	—	—	175	175	—
					Preferred Member Units	(8)	—	—	—	—	—	—	—
					Preferred Member Units	(8)	—	(306)	—	—	4,906	306	4,600
					Preferred Member Units	(8)	—	—	—	—	—	—	—
					Common Stock	(8)	—	(1,104)	—	—	1,104	1,104	—
					Warrants	(8)	—	1,104	—	—	—	—	—
VVS Holdco LLC		L+	6.00%		Secured Debt (12)	(5)	—	—	4	(5)	3	—	(2)

Table of contents Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

June 30, 2023

(dollars in thousands)

(unaudited)


Company	Total Rate	Base Rate	Spread	PIK Rate	Type of Investment(1)(10)(11)	Geography	Amount of Realized Gain/(Loss)		Amount of Unrealized Gain/(Loss)		Amount of Interest, Fees or Dividends Credited to Income(2)		December 31, 2022 Fair Value		Gross Additions(3)		Gross Reductions(4)		June 30, 2023 Fair Value (13)
	11.50%				Secured Debt	(5)	—		—		462		7,421		29		311		7,139
					Preferred Equity	(5)	—		(30)		54		2,990		—		30		2,960
Other Amounts related to investments transferred to or from other 1940 Act classification during the period							—		—		(245)		(6,392)		6,392		—		—
Total Affiliate investments							$	(7,186)	$	17,688	$	15,299	$	277,000	$	93,924	$	92,673	$	278,251

_________________________

(1)The principal amount, the ownership detail for equity investments and if the investment is income producing is included in the Consolidated Schedule of Investments included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

(2)Represents the total amount of interest, fees and dividends credited to income for the portion of the period for which an investment was included in Control or Affiliate categories, respectively. For investments transferred between Control and Affiliate categories during the period, any income or investment balances related to the time period it was in the category other than the one shown at period end is included in “Amounts related to investments transferred from other 1940 Act classifications during the period.”

(3)Gross additions include increases in the cost basis of investments resulting from new portfolio investments, follow-on investments and accrued PIK interest, and the exchange of one or more existing securities for one or more new securities. Gross additions also include net increases in unrealized appreciation or net decreases in net unrealized depreciation as well as the movement of an existing portfolio company into this category and out of a different category.

(4)Gross reductions include decreases in the cost basis of investments resulting from principal repayments or sales and the exchange of one or more existing securities for one or more new securities. Gross reductions also include net increases in net unrealized depreciation or net decreases in unrealized appreciation as well as the movement of an existing portfolio company out of this category and into a different category.

(5)Portfolio company located in the Midwest region as determined by location of the corporate headquarters. The fair value as of June 30, 2023 for affiliate investments located in this region was $96,977. This represented 15.8% of net assets as of June 30, 2023.

(6)Portfolio company located in the Northeast region as determined by location of the corporate headquarters. The fair value as of June 30, 2023 for affiliate investments located in this region was $40,988. This represented 6.7% of net assets as of June 30, 2023.

(7)Portfolio company located in the Southeast region as determined by location of the corporate headquarters. The fair value as of June 30, 2023 for affiliate investments located in this region was $29,997. This represented 4.9% of net assets as of June 30, 2023.

(8)Portfolio company located in the Southwest region as determined by location of the corporate headquarters. The fair value as of June 30, 2023 for control investments located in this region was $48,820. This represented 8.0% of net assets as of June 30, 2023. The fair value as of June 30, 2023 for affiliate investments located in this region was $79,731. This represented 13.0% of net assets as of June 30, 2023.

Table of contents Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

June 30, 2023

(dollars in thousands)

(unaudited)

(9)Portfolio company located in the West region as determined by location of the corporate headquarters. The fair value as of June 30, 2023 for control investments located in this region was $588. This represented 0.1% of net assets as of June 30, 2023. The fair value as of June 30, 2023 for affiliate investments located in this region was $30,558. This represented 5.0% of net assets as of June 30, 2023.

(10)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities,” unless otherwise noted.

(11)This schedule should be read in conjunction with the Consolidated Schedule of Investments and Notes to the Consolidated Financial Statements included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q. Supplemental information can be located within the Consolidated Schedule of Investments including end of period interest rate, preferred dividend rate, maturity date, investments not paid currently in cash and investments whose value was determined using significant unobservable inputs.

(12)Investment has an unfunded commitment as of June 30, 2023 (see Note I). The fair value of the investment includes the impact of the fair value of any unfunded commitments.

(13)Negative fair value is the result of the capitalized discount being greater than the principal amount outstanding on the loan.

Table of contents Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates

June 30, 2022

(dollars in thousands)

(unaudited)


Company	Total Rate	Base Rate	Spread	PIK Rate	Type of Investment(1)(10)(11)	Geography	Amount of Realized Gain/(Loss)		Amount of Unrealized Gain/(Loss)		Amount of Interest, Fees or Dividends Credited to Income(2)		December 31, 2021 Fair Value		Gross Additions(3)		Gross Reductions(4)		June 30, 2022 Fair Value
Control Investments
GRT Rubber Technologies LLC	9.06%	L+	8.00%		Secured Debt	(8)	$	—	$	(23)	$	1,202	$	19,152	$	23	$	23	$	19,152
					Member Units	(8)	—		—		838		22,750		—		—		22,750
Harris Preston Fund Investments					LP Interests (2717 MH, L.P.)	(8)	—		1,408		—		3,971		2,583		—		6,554
					LP Interests (2717 HPP-MS, L.P.)	(8)	—		—		—		—		—		—		—
Copper Trail Fund Investments					LP Interests (CTMH, LP)	(9)	—		—		—		710		—		—		710
Other Amounts related to investments transferred to or from other 1940 Act classification during the period							—		—		—		—		—		—		—
Total Control investments							$	—	$	1,385	$	2,040	$	46,583	$	2,606	$	23	$	49,166
Affiliate Investments
AFG Capital Group, LLC	10.00%				Secured Debt	(8)	$	—	$	—	$	1	$	36	$	—	$	36	$	—
					Preferred Member Units	(8)	—		260		—		1,930		260		—		2,190
Analytical Systems Keco Holdings, LLC	12.00%	L+	10.00%		Secured Debt	(8)	—		—		85		1,178		13		35		1,156
					Preferred Member Units	(8)	—		(140)		1		1,220		—		140		1,080
					Warrants	(8)	—		—		—		—		—		—		—
ATX Networks Corp.	8.92%	L+	7.50%		Secured Debt	(6)	—		(298)		389		7,121		229		1,222		6,128
	10.00%			10.00%	Unsecured Debt	(6)	—		122		156		1,977		279		—		2,256
Barfly Ventures, LLC					Preferred Member Units	(5)	—		157		—		643		157		—		800
Batjer TopCo, LLC	11.00%				Secured Debt	(8)	—		—		45		—		1,252		51		1,201
					Member Units	(8)	—		—		—		—		453		—		453
Brewer Crane Holdings, LLC	11.06%	L+	10.00%		Secured Debt	(9)	—		—		114		2,005		5		62		1,948
					Preferred Member Units	(9)	—		(170)		133		1,930		—		170		1,760
Centre Technologies Holdings, LLC	12.00%	L+	10.00%		Secured Debt	(8)	—		115		212		2,216		1,967		457		3,726
					Preferred Member Units	(8)	—		189		15		1,460		260		—		1,720
Chamberlin Holding LLC	9.13%	L+	8.00%		Secured Debt	(8)	—		(21)		224		4,454		21		109		4,366
					Member Units	(8)	—		—		8		385		—		27		358
					Member Units	(8)	—		(427)		87		6,030		—		400		5,630
Charps, LLC	10.00%				Unsecured Debt	(5)	—		—		—		—		—		—		—
					Preferred Member Units	(5)	—		(140)		104		3,500		—		140		3,360
Clad-Rex Steel, LLC	10.63%	L+	9.50%		Secured Debt	(5)	—		—		139		2,620		—		—		2,620
	10.00%				Secured Debt	(5)	—		—		14		268		—		4		264
					Member Units	(5)	—		20		—		132		20		—		152
					Member Units	(5)	—		—		191		2,561		—		1		2,560
Cody Pools, Inc.	12.25%	L+	10.50%		Secured Debt	(8)	—		(4)		463		7,181		656		803		7,034
					Preferred Member Units	(8)	—		890		437		11,910		890		—		12,800
Colonial Electric Company LLC	12.00%				Secured Debt	(6)	—		—		390		6,007		419		158		6,268
					Preferred Member Units	(6)	—		(40)		248		2,280		—		40		2,240
Datacom, LLC	7.50%				Secured Debt	(8)	—		(3)		49		852		12		18		846
					Preferred Member Units	(8)	—		10		5		290		10		—		300

Table of contents Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

June 30, 2022

(dollars in thousands)

(unaudited)


Company	Total Rate	Base Rate	Spread	PIK Rate	Type of Investment(1)(10)(11)	Geography	Amount of Realized Gain/(Loss)	Amount of Unrealized Gain/(Loss)	Amount of Interest, Fees or Dividends Credited to Income(2)	December 31, 2021 Fair Value	Gross Additions(3)	Gross Reductions(4)	June 30, 2022 Fair Value
Digital Products Holdings LLC	11.13%	L+	10.00%		Secured Debt	(5)	—	—	238	4,186	12	166	4,032
					Preferred Member Units	(5)	—	—	25	2,459	—	—	2,459
Direct Marketing Solutions, Inc.	12.13%	L+	11.00%		Secured Debt	(9)	—	(8)	305	4,698	246	153	4,791
					Preferred Stock	(9)	—	800	171	4,590	800	—	5,390
Flame King Holdings, LLC	12.00%	L+	11.00%		Secured Debt	(9)	—	139	336	5,145	155	—	5,300
	7.50%	L+	6.50%		Secured Debt	(9)	—	17	72	1,581	319	—	1,900
					Preferred Equity	(9)	—	750	140	2,600	750	—	3,350
Freeport Financial Funds					LP Interests (Freeport First Lien Loan Fund III LP)	(5)	—	(57)	221	7,231	—	436	6,795
Gamber-Johnson Holdings, LLC	10.00%	L+	8.00%		Secured Debt	(5)	—	(3)	275	5,400	3	3	5,400
					Member Units	(5)	—	(850)	90	12,430	—	850	11,580
GFG Group, LLC	9.00%				Secured Debt	(5)	—	(10)	175	3,136	10	10	3,136
					Preferred Member Units	(5)	—	—	95	1,750	—	—	1,750
Gulf Publishing Holdings, LLC	10.60%	L+	9.50%	5.25%	Secured Debt	(8)	—	—	2	64	—	—	64
	12.50%			6.25%	Secured Debt	(8)	—	(547)	107	2,429	—	547	1,882
HPEP 3, L.P.					LP Interests (HPEP 3, L.P.)	(8)	779	(21)	(81)	4,712	333	714	4,331
Kickhaefer Manufacturing Company, LLC	11.50%				Secured Debt	(5)	—	—	312	5,040	18	—	5,058
	9.00%				Secured Debt	(5)	—	—	44	970	—	5	965
					Member Units	(5)	—	(20)	—	3,080	—	20	3,060
					Member Units	(5)	—	—	14	615	—	—	615
Market Force Information, LLC	12.00%			12.00%	Secured Debt	(9)	—	(364)	13	2,234	13	364	1,883
MH Corbin Holding LLC	13.00%				Secured Debt	(5)	—	(374)	135	1,484	2	414	1,072
					Preferred Member Units	(5)	—	—	—	—	—	—	—
Mystic Logistics Holdings, LLC	10.00%				Secured Debt	(6)	—	—	77	1,595	—	71	1,524
					Common Stock	(6)	—	1,842	399	2,210	1,843	—	4,053
NexRev LLC	11.00%				Secured Debt	(8)	—	(429)	310	3,510	—	1,444	2,066
					Preferred Member Units	(8)	—	(773)	10	670	333	773	230
NuStep, LLC	7.63%	L+	6.50%		Secured Debt	(5)	—	2	26	430	370	—	800
	12.00%				Secured Debt	(5)	—	7	261	4,310	300	—	4,610
					Preferred Member Units	(5)	—	(490)	—	3,380	—	490	2,890
Oneliance, LLC					Preferred Stock	(7)	—	—	—	264	—	—	264
	12.06%	L+	11.00%		Secured Debt	(7)	—	—	88	1,374	3	—	1,377
Orttech Holdings, LLC	12.00%	L+	11.00%		Secured Debt	(5)	—	—	381	5,978	14	100	5,892
					Preferred Stock	(5)	—	—	96	2,500	—	—	2,500
Robbins Bros. Jewelry, Inc.	12.00%	L+	11.00%		Secured Debt	(9)	—	—	254	—	3,960	26	3,934
					Preferred Equity	(9)	—	520	31	—	1,750	—	1,750
SI East, LLC	10.25%				Secured Debt	(7)	—	74	1,164	21,950	—	496	21,454
					Preferred Member Units	(7)	—	420	115	3,860	420	—	4,280
Sonic Systems International, LLC	8.50%	L+	7.50%		Secured Debt	(8)	—	(272)	660	13,738	4,367	272	17,833
					Common Stock	(8)	—	66	25	1,250	400	—	1,650
Tedder Industries, LLC	12.00%				Secured Debt	(9)	—	8	263	3,754	42	—	3,796
	12.00%				Secured Debt	(9)	—	1	25	259	201	—	460
					Preferred Member Units	(9)	—	(372)	—	2,145	55	372	1,828

Table of contents Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

June 30, 2022

(dollars in thousands)

(unaudited)


Company	Total Rate	Base Rate	Spread	PIK Rate	Type of Investment(1)(10)(11)	Geography	Amount of Realized Gain/(Loss)		Amount of Unrealized Gain/(Loss)		Amount of Interest, Fees or Dividends Credited to Income(2)		December 31, 2021 Fair Value		Gross Additions(3)		Gross Reductions(4)		June 30, 2022 Fair Value
Trantech Radiator Topco, LLC	12.00%				Secured Debt	(7)	—		(4)		139		2,174		15		109		2,080
					Common Stock	(7)	—		(140)		15		2,160		—		140		2,020
VVS Holdco LLC	11.50%				Secured Debt	(5)	—		—		470		7,667		24		300		7,391
					Preferred Equity	(5)	—		60		50		2,960		60		—		3,020
Other Amounts related to investments transferred to or from other 1940 Act classification during the period							—		—		—		—		—		—		—
Total Affiliate investments							$	779	$	492	$	11,058	$	234,158	$	23,721	$	12,148	$	245,731

___________________________________________________

(5)Portfolio company located in the Midwest region as determined by location of the corporate headquarters. The fair value as of June 30, 2022 for affiliate investments located in this region was $82,781. This represented 12.1% of net assets as of June 30, 2022.

(6)Portfolio company located in the Northeast region as determined by location of the corporate headquarters. The fair value as of June 30, 2022 for affiliate investments located in this region was $22,469. This represented 3.3% of net assets as of June 30, 2022.

(7)Portfolio company located in the Southeast region as determined by location of the corporate headquarters. The fair value as of June 30, 2022 for affiliate investments located in this region was $31,475. This represented 4.6% of net assets as of June 30, 2022.

(8)Portfolio company located in the Southwest region as determined by location of the corporate headquarters. The fair value as of June 30, 2022 for control investments located in this region was $48,456. This represented 7.1% of net assets as of June 30, 2022. The fair value as of June 30, 2022 for affiliate investments located in this region was $70,916. This represented 10.4% of net assets as of June 30, 2022.

Table of contents Schedule 12-14

MSC INCOME FUND, INC.

Consolidated Schedule of Investments In and Advances to Affiliates (Continued)

June 30, 2022

(dollars in thousands)

(unaudited)

(9)Portfolio company located in the West region as determined by location of the corporate headquarters. The fair value as of June 30, 2022 for control investments located in this region was $710. This represented 0.1% of net assets as of June 30, 2022. The fair value as of June 30, 2022 for affiliate investments located in this region was $38,090. This represented 5.6% of net assets as of June 30, 2022.

(10)All of the Company’s portfolio investments are generally subject to restrictions on resale as “restricted securities,” unless otherwise noted.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains forward-looking statements regarding the plans and objectives of management for future operations and which relate to future events or our future performance or financial condition. Any such forward-looking statements may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and we cannot assure you that the projections included in these forward-looking statements will come to pass. Our actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors, including, without limitation the factors referenced in Item 1A entitled “Risk Factors” below in Part II of this Quarterly Report on Form 10-Q, if any, and discussed in Item 1A entitled “Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 14, 2023 and elsewhere in this Quarterly Report on Form 10-Q and our other SEC filings. Other factors that could cause actual results to differ materially include changes in the economy and future changes in laws or regulations and conditions in our operating areas.

We have based the forward-looking statements included in this Quarterly Report on Form 10-Q on information available to us on the date of this Quarterly Report on Form 10-Q, and we assume no obligation to update any such forward-looking statements, unless we are required to do so by applicable law. However, you are advised to refer to any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including subsequent periodic and current reports.

This discussion should be read in conjunction with our consolidated financial statements as of December 31, 2022, and for the year then ended, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, both contained in our Annual Report on Form 10-K for the year ended December 31, 2022, as well as the consolidated financial statements (unaudited) and notes to the consolidated financial statements (unaudited) contained in this report.

ORGANIZATION

On October 28, 2020, MSIF’s stockholders approved the appointment of MSC Adviser I, LLC (our “Adviser”), which is wholly-owned by Main Street Capital Corporation (“Main Street”), a New York Stock Exchange listed BDC, as MSIF’s investment adviser and administrator under an Investment Advisory and Administrative Services Agreement dated October 30, 2020 (our “Investment Advisory Agreement”). In such role, the Adviser has the responsibility to manage the business of MSC Income Fund, including the responsibility to identify, evaluate, negotiate and structure prospective investments, make investment and portfolio management decisions, monitor MSC Income Fund’s Investment Portfolio and provide ongoing administrative services.

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OVERVIEW OF OUR BUSINESS

Our principal investment objective is to maximize our portfolio’s total return by generating current income from our debt investments and current income and capital appreciation from our equity and equity-related investments, including warrants, convertible securities and other rights to acquire equity securities in a portfolio company. We seek to achieve our investment objective through our Private Loan (as defined below), LMM and Middle Market investment strategies. Our private loan (“Private Loan”) investment strategy involves investments in companies that are consistent with the size of the companies in our LMM and Middle Market investment strategies. Our LMM investment strategy involves investments in companies that generally have annual revenues between $10 million and $150 million. Our Middle Market investment strategy involves investments in companies that are generally larger in size than our LMM companies, with annual revenues typically between $150 million and $1.5 billion. Our Private Loan, LMM and Middle Market investments generally range in size from $1 million to $20 million.

Private Loan investments primarily consist of debt securities that have primarily been originated directly by our Adviser or, to a lesser extent, by our Adviser through its strategic relationships with other investment funds on a collaborative basis through investments that are often referred to in the debt markets as “club deals” because of the small lender group size. Our Private Loan investments are typically made to support a company owned by or in the process of being acquired by a private equity sponsor. Private Loan investments are typically similar in size, structure, terms and conditions to investments we hold in our LMM portfolio and Middle Market portfolio. Our Private Loan portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and typically have a term of between three and seven years from the original investment date. We may also co-invest with Main Street and the private equity sponsor in the equity securities of our Private Loan portfolio companies.

We seek to fill the financing gap for LMM businesses, which, historically, have had limited access to financing from commercial banks and other traditional sources. The underserved nature of the LMM creates the opportunity for us to meet the financing needs of LMM companies while also negotiating favorable transaction terms and equity participation. Our ability to invest across a company’s capital structure, from secured loans to equity securities, allows us to offer portfolio companies a comprehensive suite of financing options, or a “one stop” financing solution. Providing customized, “one-stop” financing solutions is important to LMM portfolio companies. We generally seek to partner directly with entrepreneurs, management teams and business owners in making our investments. Our LMM portfolio debt investments are generally secured by a first lien on the assets of the portfolio company and typically have a term of between five and seven years from the original investment date.

Our Middle Market portfolio investments primarily consist of direct investments in or secondary purchases of interest-bearing syndicated loans or debt securities in privately held companies based in the United States that are generally larger in size than the companies included in our LMM portfolio. Our Middle Market portfolio debt investments are generally secured by a first priority lien on the assets of the portfolio company and typically have an expected duration of between three and seven years from the original investment date.

Our other portfolio (“Other Portfolio”) investments primarily consist of investments that are not consistent with the typical profiles for our Private Loan, LMM or Middle Market portfolio investments, including investments which may be managed by third parties. In our Other Portfolio, we may incur indirect fees and expenses in connection with investments managed by third parties, such as investments in other investment companies or private funds.

Our portfolio investments are generally made through MSIF, the Taxable Subsidiaries and the Structured Subsidiaries. MSIF, the Taxable Subsidiaries and the Structured Subsidiaries share the same investment strategies and criteria. An investor’s return in MSIF will depend, in part, on the Taxable Subsidiaries’ and the Structured Subsidiaries’ investment returns as they are wholly-owned subsidiaries of MSIF.

The level of new portfolio investment activity will fluctuate from period to period based upon our view of the current economic fundamentals, our ability to identify new investment opportunities that meet our investment criteria, and

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our ability to consummate the identified opportunities and our available liquidity. The level of new investment activity, and associated interest and fee income, will directly impact future investment income. In addition, the level of dividends paid by portfolio companies and the portion of our portfolio debt investments on non-accrual status will directly impact future investment income. While we intend to grow our portfolio and our investment income over the long term, our growth and our operating results may be more limited during depressed economic periods. However, we intend to appropriately manage our cost structure and liquidity position based on applicable economic conditions and our investment outlook. The level of realized gains or losses and unrealized appreciation or depreciation on our investments will also fluctuate depending upon portfolio activity, economic conditions and the performance of our individual portfolio companies. The changes in realized gains and losses and unrealized appreciation or depreciation could have a material impact on our operating results.

We have received an exemptive order from the SEC permitting co-investments among us, Main Street and other funds and clients advised by our Adviser in certain negotiated transactions where co-investing would otherwise be prohibited under the 1940 Act. We have made co-investments with, and in the future intend to continue to make co-investments with Main Street and other funds and clients advised by our Adviser, in accordance with the conditions of the order. The order requires, among other things, that we and our Adviser consider whether each such investment opportunity is appropriate for us and the other funds and clients advised by our Adviser, as applicable, and if it is appropriate, to propose an allocation of the investment opportunity between such parties. Because our Adviser is wholly-owned by Main Street and is not managing our investment activities as its sole activity, this may provide our Adviser an incentive to allocate opportunities to other participating funds and clients instead of us. However, our Adviser has policies and procedures in place to manage this conflict, including oversight by the independent members of our Board of Directors. In addition to the co-investment program described above, we also co-invest in syndicated deals and other transactions where price is the only negotiated point by us and our affiliates.

INVESTMENT PORTFOLIO SUMMARY

The following tables provide a summary of our investments in the Private Loan, LMM and Middle Market portfolios as of June 30, 2023 and December 31, 2022 (this information excludes Other Portfolio investments, which are discussed further below).


	As of June 30, 2023
	Private Loan			LMM (a)			Middle Market
	(dollars in millions)
Number of portfolio companies	76			49			19
Fair value	$	587.6		$	363.8		$	107.9
Cost	$	583.0		$	303.3		$	137.2
Debt investments as a % of portfolio (at cost)	95.7		%	70.2		%	94.2		%
Equity investments as a % of portfolio (at cost)	4.3		%	29.8		%	5.8		%
% of debt investments at cost secured by first priority lien	99.4		%	100.0		%	100.0		%
Weighted-average annual effective yield (b)	12.9		%	12.9		%	12.1		%
Average EBITDA (c)	$	33.3		$	8.4		$	78.3

__________________

(a)At June 30, 2023, we had equity ownership in all of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%.

(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of June 30, 2023, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on our debt portfolio as of June 30, 2023 including debt investments on non-accrual status was 12.6% for our Private Loan portfolio, 12.9% for our LMM portfolio and 10.4% for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.

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Loan portfolio company, as EBITDA is not a meaningful valuation metric for our investment in this portfolio company, and those portfolio companies whose primary purpose is to own real estate.


	As of December 31, 2022
	Private Loan			LMM (a)			Middle Market
	(dollars in millions)
Number of portfolio companies	70			48			21
Fair value	$	559.8		$	352.7		$	126.7
Cost	$	563.0		$	312.5		$	159.7
Debt investments as a % of portfolio (at cost)	96.2		%	73.2		%	95.0		%
Equity investments as a % of portfolio (at cost)	3.8		%	26.8		%	5.0		%
% of debt investments at cost secured by first priority lien	99.4		%	99.9		%	98.5		%
Weighted-average annual effective yield (b)	11.8		%	12.1		%	11.3		%
Average EBITDA (c)	$	36.8		$	8.6		$	79.2

________________

(a)At December 31, 2022, we had equity ownership in all of our LMM portfolio companies, and the average fully diluted equity ownership in those portfolio companies was 9%.

(b)The weighted-average annual effective yields were computed using the effective interest rates for all debt investments at cost as of December 31, 2022, including amortization of deferred debt origination fees and accretion of original issue discount but excluding fees payable upon repayment of the debt instruments and any debt investments on non-accrual status. The weighted-average annual effective yield on our debt portfolio as of December 31, 2022 including debt investments on non-accrual status was 11.4% for our Private Loan portfolio, 11.7% for our LMM portfolio and 9.7% for our Middle Market portfolio. The weighted-average annual effective yield is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.

(c)The average EBITDA is calculated using a weighted-average for the Private Loan and Middle Market portfolios and a simple average for the LMM portfolio. These calculations exclude certain portfolio companies, including one Private Loan portfolio company, as EBITDA is not a meaningful valuation metric for our investment in this portfolio company, and those portfolio companies whose primary purpose is to own real estate.

For the three months ended June 30, 2023 and 2022, we achieved an annualized total return on investments of 15.2% and 5.2%, respectively. For the six months ended June 30, 2023 and 2022, we achieved an annualized total return on investments of 13.3% and 7.7%, respectively. For the year ended December 31, 2022, we achieved a total return on investments of 9.1%. Total return on investments is calculated using the interest, dividend and fee income, as well as the realized and unrealized change in fair value of the Investment Portfolio for the specified period. Our total return on investments is not reflective of what an investor in shares of our common stock will realize on its investment because it does not reflect our utilization of debt capital in our capital structure, our expenses or any sales load paid by an investor.

As of June 30, 2023, we had Other Portfolio investments in four entities, collectively totaling $27.1 million in fair value and $23.1 million in cost basis and which comprised 2.5% and 2.2% of our Investment Portfolio at fair value and cost, respectively. As of December 31, 2022, we had Other Portfolio investments in four entities, collectively totaling $29.0 million in fair value and $24.7 million in cost basis and which comprised 2.7% and 2.3% of our Investment Portfolio at fair value and cost, respectively.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. Critical accounting policies are those that require management to make subjective or complex judgments about the effect of matters that are inherently uncertain and may change in subsequent periods. Changes that may be required in the underlying assumptions or estimates in these areas could have a material impact on our current and future financial condition and results of operations.

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Management has discussed the development and selection of each critical accounting policy and estimate with the Audit Committee of the Board of Directors. Our critical accounting policies and estimates include the Investment Portfolio Valuation and Revenue Recognition policies described below. Our significant accounting policies are described in greater detail in Note B — Summary of Significant Accounting Policies to the consolidated financial statements included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Investment Portfolio Valuation

The most significant determination inherent in the preparation of our consolidated financial statements is the valuation of our Investment Portfolio and the related amounts of unrealized appreciation and depreciation. We consider this determination to be a critical accounting estimate, given the significant judgments and subjective measurements required. As of both June 30, 2023 and December 31, 2022, our Investment Portfolio valued at fair value represented 96% of our total assets. We are required to report our investments at fair value. We follow the provisions of FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements. ASC 820 requires us to assume that the portfolio investment is to be sold in the principal market to independent market participants, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal market that are independent, knowledgeable and willing and able to transact. See Note B.1. — Summary of Significant Accounting Policies — Valuation of the Investment Portfolio included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q for a detailed discussion of our Investment Portfolio valuation process and procedures.

Due to the inherent uncertainty in the valuation process, our determination of fair value for our Investment Portfolio may differ materially from the values that would have been determined had a ready market for the securities existed. In addition, changes in the market environment, portfolio company performance and other events that may occur over the lives of the investments may cause the gains or losses ultimately realized on these investments to be materially different than the valuations currently assigned. We determine the fair value of each individual investment and record changes in fair value as unrealized appreciation or depreciation.

In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which permits a BDC’s board of directors to designate its executive officers or investment adviser as a valuation designee to determine the fair value for its investment portfolio, subject to the active oversight of the board. Our Board of Directors has approved policies and procedures pursuant to Rule 2a-5 (the “Valuation Procedures”) and has designated our Adviser, led by a group of Main Street’s and our Adviser’s executive officers, to serve as the Board of Directors’ valuation designee. We believe our Investment Portfolio as of June 30, 2023 and December 31, 2022 approximates fair value as of those dates based on the markets in which we operate and other conditions in existence on those reporting dates.

Revenue Recognition

Interest and Dividend Income

We record interest and dividend income on the accrual basis to the extent amounts are expected to be collected. Dividend income is recorded as dividends are declared by the portfolio company or at the point an obligation exists for the portfolio company to make a distribution. We evaluate accrued interest and dividend income periodically for collectability. When a loan or debt security becomes 90 days or more past due, and if we otherwise do not expect the debtor to be able to service its debt obligation, we will generally place the loan or debt security on non-accrual status and cease recognizing interest income on that loan or debt security until the borrower has demonstrated the ability and intent to pay contractual amounts due. If a loan or debt security’s status significantly improves regarding the debtor’s ability to service the debt obligation, or if a loan or debt security is sold or written off, we remove it from non-accrual status.

Fee Income

We may periodically provide services, including structuring and advisory services to our portfolio companies or other third parties. For services that are separately identifiable and evidence exists to substantiate fair value, fee income is recognized as earned, which is generally when the investment or other applicable transaction closes. Fees received in connection with debt financing transactions for services that do not meet these criteria are treated as debt origination fees and are generally deferred and accreted into income over the life of the financing.

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Payment-in-Kind (“PIK”) Interest and Cumulative Dividends

We hold certain debt and preferred equity instruments in our Investment Portfolio that contain PIK interest and cumulative dividend provisions. The PIK interest, computed at the contractual rate specified in each debt agreement, is periodically added to the principal balance of the debt and is recorded as interest income. Thus, the actual collection of this interest may be deferred until the time of debt principal repayment. Cumulative dividends are recorded as dividend income, and any dividends in arrears are added to the balance of the preferred equity investment. The actual collection of these dividends in arrears may be deferred until such time as the preferred equity is redeemed or sold. To maintain RIC tax treatment (as discussed in Note B.7. — Summary of Significant Accounting Policies — Income Taxes included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q), these non-cash sources of income may need to be paid out to stockholders in the form of distributions, even though we may not have collected the PIK interest and cumulative dividends in cash. We stop accruing PIK interest and cumulative dividends and write off any accrued and uncollected interest and dividends in arrears when we determine that such PIK interest and dividends in arrears are no longer collectible. For the three months ended June 30, 2023 and 2022, (i) 3.4% and 3.5%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.1% and 0.3%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash. For the six months ended June 30, 2023 and 2022, (i) 3.6% and 2.7%, respectively, of our total investment income was attributable to PIK interest income not paid currently in cash and (ii) 0.1% and 1.1%, respectively, of our total investment income was attributable to cumulative dividend income not paid currently in cash.

INVESTMENT PORTFOLIO COMPOSITION

The following tables summarize the composition of our total combined Private Loan, LMM and Middle Market portfolio investments at cost and fair value by type of investment as a percentage of the total combined Private Loan, LMM and Middle Market portfolio investments as of June 30, 2023 and December 31, 2022 (this information excludes Other Portfolio investments).


Cost:	June 30, 2023		December 31, 2022
First lien debt	87.6	%	88.5	%
Equity	11.9		10.8
Second lien debt	0.3		0.3
Equity warrants	0.2		0.2
Other	—		0.2
	100.0	%	100.0	%


Fair Value:	June 30, 2023		December 31, 2022
First lien debt	79.9	%	81.4	%
Equity	19.7		17.9
Second lien debt	0.3		0.3
Equity warrants	0.1		0.1
Other	—		0.3
	100.0	%	100.0	%

Our Private Loan, LMM and Middle Market portfolio investments carry a number of risks including: (1) investing in companies which may have limited operating histories and financial resources; (2) holding investments that generally are not publicly traded and which may be subject to legal and other restrictions on resale; and (3) other risks common to investing in below investment-grade debt and equity investments in our Investment Portfolio. Please see Item 1A. Risk Factors — Risks Related to our Investments contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for a more complete discussion of the risks involved with investing in our Investment Portfolio.

PORTFOLIO ASSET QUALITY

We utilize an internally developed investment rating system to rate the performance of each Private Loan, LMM and Middle Market portfolio company and to monitor our expected level of returns on each of our Private Loan, LMM and Middle Market investments in relation to our expectations for the portfolio company. The investment rating system takes

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into consideration various factors, including each investment’s expected level of returns, the collectability of our debt investments and the ability to receive a return of the invested capital in our equity investments, comparisons to competitors and other industry participants, the portfolio company’s future outlook and other factors that are deemed to be significant to the portfolio company.

As of June 30, 2023, our total Investment Portfolio had four investments on non-accrual status, which comprised 0.3% of its fair value and 2.8% of its cost. As of December 31, 2022, our total Investment Portfolio had seven investments on non-accrual status, which comprised 0.8% of its fair value and 4.8% of its cost.

The operating results of our portfolio companies are impacted by changes in the broader fundamentals of the United States economy. In periods during which the United States economy contracts, it is likely that the financial results of small to mid-sized companies, like those in which we invest, could experience deterioration or limited growth from current levels, which could ultimately lead to difficulty in meeting their debt service requirements, to an increase in defaults on our debt investments or in realized losses on our investments and to difficulty in maintaining historical dividend payment rates and unrealized appreciation on our equity investments. Consequently, we can provide no assurance that the performance of certain portfolio companies will not be negatively impacted by future economic cycles or other conditions, which could also have a negative impact on our future results.

DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS

Comparison of the three months ended June 30, 2023 and 2022

Set forth below is a comparison of the results of operations for the three months ended June 30, 2023 and 2022.


	Three Months Ended June 30,				Net Change
	2023		2022		Amount		%
	(dollars in thousands)
Total investment income	$	33,228	$	24,339	$	8,889	37	%
Total expenses, net of expense waivers	(18,830)		(11,444)		(7,386)		65	%
Net investment income	14,398		12,895		1,503		12	%
Total net realized gain (loss) from investments	(28,852)		372		(29,224)		NM
Total net unrealized appreciation (depreciation) from investments	35,757		(10,749)		46,506		NM
Income tax provision	(2,047)		(695)		(1,352)		NM
Net increase in net assets resulting from operations	$	19,256	$	1,823	$	17,433	956	%

_________________

NM — Net Change % not meaningful

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Investment Income

Total investment income for the three months ended June 30, 2023 was $33.2 million, a 37% increase from the $24.3 million of total investment income for the corresponding period of 2022. The following table provides a summary of the changes in the comparable period activity.


	Three Months Ended June 30,				Net Change
	2023		2022		Amount		%
	(dollars in thousands)
Interest income	$	28,459	$	21,162	$	7,297	34	%	(a)
Dividend income	3,904		2,471		1,433		58	%	(b)
Fee income	865		706		159		23	%
Total investment income	$	33,228	$	24,339	$	8,889	37	%	(c)

_________________

(a)The increase in interest income was primarily due to an increase in interest rates on floating rate Investment Portfolio debt investments primarily resulting from increases in benchmark index rates and an increase in interest rate spreads on new investments over the last twelve months.

(b)The increase in dividend income from Investment Portfolio equity investments was primarily a result of higher dividend income from a variety of portfolio companies and $0.8 million from dividend income considered to be less consistent or non-recurring.

(c)The increase in total investment income includes a net increase of $1.1 million due to the impact of certain income considered to be less consistent or non-recurring, including an $0.8 million increase in dividend income and a $0.3 million increase in total accelerated prepayment and other activity related to certain Investment Portfolio debt investments.

Expenses

Total expenses, net of expense waivers, for the three months ended June 30, 2023 were $18.8 million, a 65% increase from $11.4 million in the corresponding period of 2022. The following table provides a summary of the changes in the comparable period activity.


	Three Months Ended June 30,				Net Change
	2023		2022		Amount		%
	(dollars in thousands)
Interest expense	$	8,862	$	5,299	$	3,563	67	%	(a)
Base management fees	4,912		4,955		(43)		(1)	%
Incentive fees	3,599		—		3,599		NM		(b)
Internal administrative services fees	2,545		1,302		1,243		95	%	(c)
General and administrative	1,306		1,037		269		26	%
Total expenses before expense waivers	21,224		12,593		8,631		69	%
Waiver of internal administrative services expenses	(2,394)		(1,149)		(1,245)		108	%
Total expenses	$	18,830	$	11,444	$	7,386	65	%

_________________

(a)The increase in interest expense was primarily related to higher floating interest rates on our Credit Facilities (as defined in the Liquidity and Capital Resources section below) based upon the increases in bench market index rates.

(b)The increase in incentive fees was due to the increased Pre-Incentive Fee Net Investment Income resulting from MSC Income Fund’s more favorable operating results for the three months ended June 30, 2023 compared to the corresponding period of 2022.

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(c)The increase in internal administrative service fees related primarily to increased expenses incurred by the Adviser associated with its activities and services under the Investment Advisory Agreement. Consistent with prior practices, the vast majority of such internal administrative service fees, or all fees other than $0.2 million, were waived by the Adviser. The only fees not waived are the cost of services previously provided by a sub-administrator prior to January 1, 2022 (see Note J.1. — Related Party Transactions — Advisory Agreements and Conditional Expense Reimbursement Waivers included in Item 1. Consolidated Financial Statements).

Net Investment Income

Net investment income for the three months ended June 30, 2023 increased to $14.4 million, or $0.18 per share, compared to net investment income of $12.9 million, or $0.16 per share, for the corresponding period of 2022. The increase in net investment income was principally attributable to the increase in total investment income, partially offset by the increase in total expenses, including incentive fees, each as discussed above. The increase in net investment income on a per share basis includes a $0.01 per share increase in investment income considered less consistent or non-recurring.

Net Realized Gain (Loss) from Investments

The following table provides a summary of the primary components of the total net realized loss on investments of $28.9 million for the three months ended June 30, 2023.


	Three Months Ended June 30, 2023
	Full Exits			Partial Exits			Restructures			Other (a)		Total
	Net Gain/(Loss)		# of Investments	Net Gain/(Loss)		# of Investments	Net Gain/(Loss)		# of Investments	Net Gain/(Loss)		Net Gain/(Loss)
	(dollars in thousands)
Private Loan portfolio	$	—	—	$	—	—	$	(10,459)	1	$	(10)	$	(10,469)
LMM portfolio	(8,823)		2	—		—	—		—	—		(8,823)
Middle Market portfolio	—		—	—		—	(10,607)		2	—		(10,607)
Other Portfolio	—		—	1,047		1	—		—	—		1,047
Total net realized gain/(loss)	$	(8,823)	2	$	1,047	1	$	(21,066)	3	$	(10)	$	(28,852)

_________________

(a)Other activity includes realized gains and losses from transactions involving five portfolio companies which are not considered to be significant individually or in the aggregate.

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Net Unrealized Appreciation (Depreciation)

The following table provides a summary of the total net unrealized appreciation of $35.8 million for the three months ended June 30, 2023.


	Three Months Ended June 30, 2023
	Private Loan		LMM(a)		Middle Market		Other		Total
	(dollars in thousands)
Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains / income) losses recognized during the current period	$	10,516	$	8,663	$	10,607	$	(1,046)	$	28,740
Net unrealized appreciation (depreciation) relating to portfolio investments	(1,730)		6,280		1,401		1,066		7,017
Total net unrealized appreciation (depreciation) relating to portfolio investments	$	8,786	$	14,943	$	12,008	$	20	$	35,757

_________________

(a)Includes unrealized appreciation on 23 LMM portfolio investments and unrealized depreciation on 12 LMM portfolio investments.

The realized losses recognized in the second quarter were completed at a net realized fair value $2.9 million greater than the fair value for such investments at the end of the first quarter of 2023.

Income Tax Provision

The income tax provision for the three months ended June 30, 2023 of $2.0 million principally consisted of (i) a deferred tax provision of $1.8 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences and (ii) a current tax provision of $0.2 million related to a $0.1 million provision for excise tax on our estimated undistributed taxable income and $0.1 million provision for current federal and state income taxes. The income tax provision for the three months ended June 30, 2022 of $0.7 million principally consisted of (i) a current tax provision of $0.6 million related to a $0.5 million provision for excise tax on our estimated undistributed taxable income and $0.1 million provision for current state income taxes and (ii) a deferred tax provision of $0.1 million which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences.

Net Increase in Net Assets Resulting from Operations

The net increase in net assets resulting from operations for the three months ended June 30, 2023 was $19.3 million, or $0.24 per share, compared with $1.8 million, or $0.02 per share, during the three months ended June 30, 2022. The tables above provide a summary of the reasons for the change in net increase in net assets resulting from operations for the three months ended June 30, 2023 as compared to the three months ended June 30, 2022.

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Comparison of the six months ended June 30, 2023 and 2022

Set forth below is a comparison of the results of operations for the six months ended June 30, 2023 and June 30, 2022.


	Six Months Ended June 30,				Net Change
	2023		2022		Amount		%
	(dollars in thousands)
Total investment income	$	64,274	$	47,740	$	16,534	35	%
Total expenses, net of expense waivers	(35,768)		(22,151)		(13,617)		61	%
Net investment income	28,506		25,589		2,917		11	%
Total net realized gain (loss) from investments	(25,421)		625		(26,046)		NM

Total net unrealized appreciation (depreciation) from investments	31,618		(7,017)		38,635		NM
Income tax provision	(3,217)		(1,159)		(2,058)		NM
Net increase in net assets resulting from operations	$	31,486	$	18,038	$	13,448	75	%

_________________

NM Net change % not meaningful

Investment Income

Total investment income for the six months ended June 30, 2023 was $64.3 million, a 35% increase from the $47.7 million of total investment income for the corresponding period of 2022. The following table provides a summary of the changes in the comparable period activity.


	Six Months Ended June 30,				Net Change
	2023		2022		Amount		%
	(dollars in thousands)
Interest income	$	57,391	$	41,231	$	16,160	39	%	(a)
Dividend income	5,463		5,264		199		4	%	(b)
Fee income	1,420		1,245		175		14	%
Total investment income	$	64,274	$	47,740	$	16,534	35	%	(c)

_________________

(a)The increase in interest income was primarily due to (i) an increase in interest rates on floating rate Investment Portfolio debt investments primarily resulting from increases in benchmark index rates, (ii) an increase in interest rate spreads on new investments over the last twelve months and (iii) increased accelerated OID income recognized on the repayment of certain Investment Portfolio debt investments.

(b)The increase in dividend income from Investment Portfolio equity investments was primarily a result of a $0.8 million increase related to dividend income considered to be less consistent or non-recurring, partially offset by a decline in dividend income from a variety of portfolio companies.

(c)The increase in total investment income includes a net increase of $2.3 million due to the impact of certain income considered less consistent or non-recurring, including (i) an $0.8 million increase in dividend income and (ii) a $1.5 million increase in accelerated prepayment, repricing and other activity related to certain Investment Portfolio debt investments.

Expenses

Total expenses, net of fee and expense waivers, for the six months ended June 30, 2023 were $35.8 million, a 61% increase from $22.2 million in the corresponding period of 2022. The following table provides a summary of the changes in the comparable period activity.

Six Months Ended
June 30,

Net Change

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	2023		2022		Amount		%
	(dollars in thousands)
Interest expense	$	17,196	$	9,827	$	7,369	75	%	(a)
Base management fees	9,767		9,945		(178)		(2)	%
Incentive fees	6,319		—		6,319		NM		(b)
Internal administrative services fees	4,584		2,483		2,101		85	%	(c)
General and administrative	2,185		2,075		110		5	%
Total expenses before expense waivers	40,051		24,330		15,721		65	%
Waiver of internal administrative services expenses	(4,283)		(2,179)		(2,104)		97	%
Total expenses	$	35,768	$	22,151	$	13,617	61	%

_________________

(a)The increase in interest expense was primarily related to higher floating interest rates on our Credit Facilities (as defined in the Liquidity and Capital Resources section below) due to increases in benchmark index rates, partially offset by lower weighted average outstanding debt balances.

(b)The increase in incentive fees was due to the increased Pre-Incentive Fee Net Investment Income resulting from MSC Income Fund’s more favorable operating results for the six months ended June 30, 2023.

(c)The increase in internal administrative service fees related primarily to increased expenses incurred by the Adviser associated with its activities and services under the Investment Advisory Agreement. Consistent with prior practice, the vast majority of such internal administrative service fees, or all fees other than $0.3 million, were waived by the Adviser. The only fees not waived are the cost of services previously provided by a sub-administrator prior to January 1, 2022 (see Note J.1. — Related Party Transactions — Advisory Agreements and Conditional Expense Reimbursement Waivers included in Item 1. Consolidated Financial Statements).

Net Investment Income

Net investment income for the six months ended June 30, 2023 increased 11% to $28.5 million, or $0.36 per share, compared to net investment income of $25.6 million, or $0.32 per share, for the corresponding period of 2022. The increase in net investment income was principally attributable to the increase in total investment income, partially offset by increase in total expenses, including incentive fees. The increase in net investment income and net investment income per share includes a $2.3 million, or $0.03 per share, increase in investment income considered to be less consistent or non-recurring, each as discussed above.

Net Realized Gain (Loss) from Investments

The following table provides a summary of the primary components of the total net realized loss on investments of ($25.4) million for the six months ended June 30, 2023.


	Six Months Ended June 30, 2023
	Full Exits			Partial Exits			Restructures			Other (a)		Total
	Net Gain/(Loss)		# of Investments	Net Gain/(Loss)		# of Investments	Net Gain/(Loss)		# of Investments	Net Gain/(Loss)		Net Gain/(Loss)
	(dollars in thousands)
Private Loan portfolio	$	868	1	$	—	—	$	(10,459)	1	$	(12)	$	(9,603)
LMM portfolio	(8,823)		2	—		—	(1,542)		1	—		(10,365)
Middle Market portfolio	3,480		2	—		—	(10,607)		2	(3)		(7,130)
Other Portfolio	—		—	1,677		1	—		—	—		1,677
Total net realized gain (loss)	$	(4,475)	5	$	1,677	1	$	(22,608)	4	$	(15)	$	(25,421)

_________________

(a)Other activity includes realized gains and losses from transactions involving 6 portfolio companies which are not considered to be significant individually or in the aggregate.

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Net Unrealized Appreciation (Depreciation)

The following table provides a summary of the total net unrealized appreciation of $31.6 million for the six months ended June 30, 2023.


	Six Months Ended June 30, 2023
	Private Loan		LMM(a)		Middle Market		Other		Total
	(dollars in thousands)
Accounting reversals of net unrealized (appreciation) depreciation recognized in prior periods due to net realized (gains / income) losses recognized during the current period	$	10,516	$	10,062	$	7,432	$	(1,677)	$	26,333
Net unrealized appreciation (depreciation) relating to portfolio investments	(2,627)		10,291		(3,714)		1,335		5,285
Total net unrealized appreciation (depreciation) relating to portfolio investments	$	7,889	$	20,353	$	3,718	$	(342)	$	31,618

_________________

(a)Includes unrealized appreciation on 22 LMM portfolio investments and unrealized depreciation on 16 LMM portfolio investments.

Income Tax Provision

The income tax provision for the six months ended June 30, 2023 of $3.2 million principally consisted of (i) a current tax provision of $0.5 million related to a $0.2 million provision for excise tax on our estimated undistributed taxable income and $0.3 million provision for current federal and state income taxes and (ii) a deferred tax provision of $2.7 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences. The income tax provision for the six months ended June 30, 2022 of $1.2 million consisted of a current tax provision of $1.0 million related to a $0.7 million provision for excise tax on our estimated undistributed taxable income and $0.3 million provision for current state income taxes and a deferred tax provision of $0.2 million, which is primarily the result of the net activity relating to our portfolio investments held in our Taxable Subsidiaries, including changes in loss carryforwards, changes in net unrealized appreciation/depreciation and other temporary book-tax differences.

Net Increase in Net Assets Resulting from Operations

The net increase in net assets resulting from operations for the six months ended June 30, 2023 was $31.5 million, or $0.39 per share, compared with $18.0 million, or $0.23 per share, during the six months ended June 30, 2022. The tables above provide a summary of the reasons for the change in net increase in net assets resulting from operations for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

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LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

For the six months ended June 30, 2023, we realized a net increase in cash and cash equivalents of $8.7 million as the result of $19.0 million of cash provided by our operating activities, partially offset by $10.3 million of cash used in our financing activities.

The $19.0 million of cash provided by our operating activities resulted primarily from (i) cash proceeds totaling $106.8 million from the sales and repayments of debt investments and sales of and return of capital from equity investments, (ii) cash flows that we generated from the operating profits earned totaling $21.1 million, which is our net investment income, excluding the non-cash effects of the accretion of unearned income, payment-in-kind interest income, cumulative dividends and the amortization expense for deferred financing costs and (iii) cash proceeds of $3.2 million related to the change in other assets and liabilities, partially offset by the funding of new portfolio investments of $112.1 million.

The $10.3 million of cash used in our financing activities principally consisted of (i) $17.7 million in cash dividends paid to stockholders and (ii) $10.5 million for the repurchases of common stock, partially offset by (i) $16.0 million net cash proceeds related to our TIAA Credit Facility and JPM SPV Facility (together, the “Credit Facilities”) and (ii) $2.0 million cash proceeds related to common stock issuance.

Share Repurchase Program

On March 31, 2020, our Board of Directors unanimously approved a temporary suspension of the share repurchase program commencing with the second quarter of 2020. Our Board of Directors determined that it was the best interest of the Company to suspend the share repurchase program in order to preserve the financial flexibility and liquidity given the prolonged impact of COVID-19.

On March 2, 2021, our Board of Directors unanimously approved the reinstatement of the share repurchase program commencing in April 2021 with repurchases effectuated via tender offers, and we have conducted quarterly tender offers pursuant to the share repurchase program since then. The quarterly tender offers are generally equal to 90% of the aggregate dividend reinvestment plan proceeds resulting from dividend payments. See Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Part II of this Quarterly Report on Form 10-Q for more information regarding repurchases of our common stock during the three months ended June 30, 2023.

Modified Dutch Auction Tender Offer

On May 15, 2023 we commenced a modified “Dutch Auction” tender offer (the “Modified Dutch Auction Tender Offer”) to purchase for cash, for an aggregate purchase price of not more than $2.0 million in value of its shares of common stock, subject to the conditions described in the Offer to Purchase, dated May 15, 2023 and which expired on June 13 2023. Pursuant to the Modified Dutch Auction Tender Offer, we repurchased 406,904 shares, representing 0.5% of our then outstanding shares, on June 21, 2023 at a price of $5.50 per share for an aggregate cost of $2.2 million, excluding fees and expenses related to the Modified Dutch Auction Tender Offer. We used available cash to fund the purchases of our shares of common stock in the Modified Dutch Auction Tender offer and to pay for all related fees and expenses. In accordance with rules promulgated by the Securities and Exchange Commission (“SEC”), we had the option to increase the number of shares accepted for payment in the Modified Dutch Auction Tender Offer by up to 2.0% of our outstanding shares without amending or extending the Modified Dutch Auction Tender Offer. We exercised that option and increased the Tender Offer by $0.2 million to avoid any proration for the stockholders tendering shares at or below the clearing price. These shares are included in the total shares purchased noted above.

Capital Resources

As of June 30, 2023, we had $30.1 million in cash and cash equivalents and $152.3 million of unused capacity under the Credit Facilities, which we maintain to support our investment and operating activities. As of June 30, 2023, our NAV totaled $613.8 million, or $7.67 per share.

As of June 30, 2023, we had $85.0 million outstanding and $80.0 million of undrawn commitments under our TIAA Credit Facility and $252.7 million outstanding and $72.3 million of undrawn commitments under our JPM SPV Facility, both of which we estimated approximated fair value. Availability under our Credit Facilities is subject to certain leverage and borrowing base limitations, various covenants, reporting requirements and other customary requirements for

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similar credit facilities. For further information on our Credit Facilities, including key terms and financial covenants, refer to Note D — Debt included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

We closed our continuous follow-on public offering of shares to new investors effective September 2017. As such, our ability to raise additional equity is limited.

As a BDC, we generally are required to maintain a coverage ratio, or BDC asset coverage ratio, of total assets to total senior securities, which include borrowings and any preferred stock we may issue in the future, of at least 200% (or 150% if certain requirements are met in the future). This requirement limits the amount that we may borrow. As of June 30, 2023, our BDC asset coverage ratio was 226%. The combination of these factors limits our access to capital to fund future investment activities or operating requirements, including our ability to grow the Investment Portfolio. We anticipate that we will continue to fund our investment activities and operating requirements through existing cash and cash equivalents, cash flows generated through our ongoing operating activities, including cash proceeds from the repayments and from the sales of investments in our portfolio companies, and utilization of available borrowings under our Credit Facilities. Our primary uses of funds will be investments in portfolio companies, operating expenses, cash distributions to holders of our common stock and share repurchases under our share repurchase programs.

We periodically invest excess cash balances into marketable securities and idle funds investments. The primary investment objective of marketable securities and idle funds investments is to generate incremental cash returns on excess cash balances prior to utilizing those funds for investment in our Private Loan, LMM and Middle Market portfolio investments. Marketable securities and idle funds investments generally consist of debt investments, independently rated debt investments, certificates of deposit with financial institutions, diversified bond funds and publicly traded debt and equity investments.

In order to satisfy the Code requirements applicable to a RIC, we intend to distribute to our stockholders, after consideration and application of our ability under the Code to carry forward certain excess undistributed taxable income from one tax year into the next tax year, substantially all of our taxable income.

Although we have been able to secure access to additional liquidity, including through the Credit Facilities and the Note Purchase Agreement, there is no assurance that debt or equity capital will be available to us in the future on favorable terms, or at all.

Recently Issued or Adopted Accounting Standards

From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that are adopted by us as of the specified effective date. We believe that the impact of recently issued standards and any that are not yet effective will not have a material impact on our consolidated financial statements upon adoption. For a description of recently issued or adopted accounting standards, see Note B.11. — Summary of Significant Accounting Policies — Recently Issued or Adopted Accounting Standards included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Inflation

Inflation has not historically had a significant effect on our results of operations in any of the reporting periods presented herein. However, our portfolio companies have experienced, specifically including over the last few years, as a result of recent geopolitical events, supply chain and labor issues, and may continue to experience, the increasing impacts of inflation on their operating results, including periodic escalations in their costs for labor, raw materials and third-party services and required energy consumption. These issues and challenges related to inflation are receiving significant attention from our investment teams and the management teams of our portfolio companies as we work to manage these growing challenges. Prolonged or more severe impacts of inflation to our portfolio companies could continue to affect their operating profits and, thereby, increase their borrowing costs, and as a result negatively impact their ability to service their debt obligations and/or reduce their available cash for distributions. In addition, these factors could have a negative effect on the fair value of our investments in these portfolio companies. The combined impacts therefrom in turn could negatively affect our results of operations.

Off-Balance Sheet Arrangements

We may be a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of our portfolio companies. These instruments include commitments to extend credit and fund equity capital and involve, to varying degrees, elements of liquidity and credit risk in excess of the amount recognized in the Consolidated Balance Sheets. At June 30, 2023, we had a total of $67.8 million in outstanding commitments comprised of

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(i) 71 investments with commitments to fund revolving loans that had not been fully drawn or term loans with additional commitments not yet funded and (ii) three investments with equity capital commitments that had not been fully called.

Contractual Obligations

As of June 30, 2023, we had $487.7 million in total borrowings outstanding under our Credit Facilities and Series A Notes. The TIAA Credit Facility will mature on March 1, 2026. The JPM SPV Facility will mature on February 3, 2025. The Series A Notes will mature on October 30, 2026. See further discussion of the terms of our Credit Facilities, Series A Notes and other debt in Note D — Debt included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

A summary of our significant contractual payment obligations for the repayment of outstanding borrowings at June 30, 2023 is as follows:


	2023		2024		2025		2026		2027		Thereafter		Total
	(dollars in thousands)
JPM SPV Facility(1)	$	—	$	—	$	252,688	$	—	$	—	$	—	$	252,688
Series A Notes	—		—		—		150,000		—		—		150,000
Interest due on Series A Notes	3,030		6,060		6,060		6,060		—		—		21,210
TIAA Credit Facility(2)	—		—		—		85,000		—		—		85,000
Total	$	3,030	$	6,060	$	258,748	$	241,060	$	—	$	—	$	508,898

_________________

(1)As of June 30, 2023, $72.3 million remained available to borrow under the JPM SPV Facility; however, our borrowing ability is limited to leverage and borrowing base restrictions imposed by the JPM SPV Facility and the 1940 Act, as discussed above.

(2)As of June 30, 2023, $80.0 million remained available to borrow under the TIAA Credit Facility; however, our borrowing ability is limited to leverage and borrowing base restrictions imposed by the TIAA Credit Facility and the 1940 Act, as discussed above.

Related Party Transactions and Agreements

We have entered into agreements with our Adviser and/or certain of its affiliates and other parties whereby we pay certain fees and reimbursements to these entities. These included payments for selling commissions and fees and for reimbursement of offering costs. In addition, we make payments for certain services that include the identification, execution and management of our investments and also the management of our day-to-day operations provided to us by our Adviser, pursuant to various agreements that we have entered into. See Note J — Related Party Transactions included in Item 1. Consolidated Financial Statements of this Quarterly Report on Form 10-Q for additional information regarding these related party transactions and agreements.

Recent Developments

On August 1, 2023, we sold 348,542 shares of our common stock to Main Street at $7.89 per share, the

price at which we issued new shares in connection with reinvestments of the August 1, 2023 dividend pursuant

to the DRIP, for total proceeds to us of $2.8 million. The issuance and sale were made pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and was unanimously approved by the Board, including each director who is not an “interested person,” as such term is defined in Section 2(a)(19) of the 1940 Act, of us or our Adviser.

On August 1, 2023, we repurchased 545,206 shares of our common stock validly tendered and not withdrawn on the terms set forth in our tender offer statement on Schedule TO and Offer to Purchase filed with the SEC on August 3, 2023. The shares were repurchased at a price of $7.74 per share, which was our NAV per share as of August 1, 2023, for an

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aggregate purchase price of $4.2 million (an amount equal to 90% of the proceeds we received from the issuance of shares under the our DRIP from the August 1, 2023 dividend payment).

On August 10, 2023, our Board of Directors declared a quarterly cash dividend of $0.175 per share payable November 1, 2023 to stockholders of record as of September 29, 2023. Additionally, our Board approved a repurchase offer pursuant to our share repurchase program in an amount equal to 90% of the proceeds resulting from shares issued in lieu of cash distributions from the November 1, 2023 dividend payment.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates, and changes in interest rates may affect both our interest expense on the debt outstanding under our Credit Facilities and our interest income from portfolio investments. Our risk management systems and procedures are designed to identify and analyze our risk, to set appropriate policies and limits and to continually monitor these risks. Our investment income will be affected by changes in various interest rate indices, including LIBOR, SOFR and Prime rates, to the extent that any debt investments include floating interest rates. See Risk Factors — Risks Related to our Investments — The interest rates of some of our investments are priced using a spread over LIBOR, which will be phased out in the future., Risk Factors — Risks Related to our Business and Structure — We are subject to risks associated with the interest rate environment and changes in interest rates will affect our cost of capital, net investment income and the value of our investments. and Risk Factors — Risks Related to Leverage — Because we borrow money, the potential for gain or loss on amounts invested in us is magnified and may increase the risk of investing in us. included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for more information regarding risks associated with our debt investments and borrowings that utilize LIBOR, SOFR or Prime as a reference rate.

The majority of our debt investments are made with either fixed interest rates or floating rates that are subject to contractual minimum interest rates for the term of the investment. As of June 30, 2023, 82% of our debt Investment Portfolio (at cost) bore interest at floating rates, 92% of which were subject to contractual minimum interest rates. As of June 30, 2023, 31% of our debt obligations bore interest at fixed rates. Our interest expense associated with our Credit Facilities will be affected by changes in the published SOFR. However, the interest rates on our outstanding Series A Notes are fixed for the life of such debt. As of June 30, 2023, we had not entered into any interest rate hedging arrangements. Due to our limited use of derivatives, we have claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act and, therefore, are not subject to registration or regulation as a pool operator under such Act. The Company intends to operate as a “limited derivatives user” under Rule 18f-4 under the 1940 Act.

The following table shows the approximate annualized increase or decrease in the components of net investment income due to hypothetical base rate changes in interest rates, assuming no changes in our investments and borrowings as of June 30, 2023.


Basis Point Change	Increase (Decrease) in Interest Income		(Increase) Decrease in Interest Expense		Increase (Decrease) in Net Investment Income		Increase (Decrease) in Net Investment Income per Share
	(dollars in thousands, except per share amounts)
(200)	$	(14,662)	$	6,754	$	(7,908)	$	(0.10)
(175)	(12,827)		5,910		(6,917)		(0.09)
(150)	(10,995)		5,065		(5,930)		(0.07)
(125)	(9,162)		4,221		(4,941)		(0.06)
(100)	(7,330)		3,377		(3,953)		(0.05)
(75)	(5,497)		2,533		(2,964)		(0.04)
(50)	(3,665)		1,688		(1,977)		(0.02)
(25)	(1,832)		844		(988)		(0.01)
25	1,832		(844)		988		0.01
50	3,665		(1,688)		1,977		0.02
75	5,497		(2,533)		2,964		0.04
100	7,330		(3,377)		3,953		0.05
125	9,162		(4,221)		4,941		0.06
150	10,995		(5,065)		5,930		0.07
175	12,827		(5,910)		6,917		0.09
200	14,660		(6,754)		7,906		0.10

Although we believe that this analysis is indicative of the impact of interest rate changes to our Net Investment Income as of June 30, 2023, the analysis does not take into consideration future changes in the credit market, credit quality, or other business or economic developments that could affect our Net Investment Income. Accordingly, we can offer no assurances that actual results would not differ materially from the analysis above. The hypothetical results assume that all

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LIBOR, SOFR and Prime rate changes would be effective on the first day of the period. However, the contractual LIBOR, SOFR and Prime rate reset dates would vary throughout the period. The majority of our investments are based on contracts which reset quarterly while our TIAA Credit Facility and our JPM SPV Facility reset on a monthly and quarterly basis, respectively. The hypothetical results would also be impacted by the changes in the amount of debt outstanding under our Credit Facilities (with an increase (decrease) in the debt outstanding under the Credit Facilities resulting in an (increase) decrease in the hypothetical interest expense).

Item 4. Controls and Procedures

As of the end of the period covered by this quarterly report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Financial Officer, Chief Compliance Officer and Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15 of the Exchange Act). Based on that evaluation, our Chief Executive Officer, Chief Financial Officer, Chief Compliance Officer and Chief Accounting Officer have concluded that our current disclosure controls and procedures are effective in timely alerting them of material information relating to us that is required to be disclosed in the reports we file or submit under the Exchange Act. There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We, the Adviser and/or Main Street may, from time to time, be involved in litigation arising out of our operations in the normal course of business or otherwise. Furthermore, third parties may seek to impose liability on us, the Adviser and/or Main Street in connection with the activities of our portfolio companies. While the outcome of any current legal proceedings cannot at this time be predicted with certainty, we do not expect any current matters will materially affect our, the Adviser’s or Main Street’s financial condition or results of operations; however, there can be no assurance whether any pending legal proceedings will have a material adverse effect on our, the Adviser’s or Main Street’s financial condition or results of operations in any future reporting period.

Item 1A. Risk Factors

You should carefully consider the risks described below and all other information contained in this Quarterly Report on Form 10-Q, including our interim consolidated financial statements and the related notes thereto, before making a decision to purchase our securities. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse effect on our business, financial condition and/or operating results, as well as the market price of our securities.

In addition to the other information set forth in this report, you should carefully consider the risk factors described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 that we filed with the SEC on March 14, 2023 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 that we filed with the SEC on May 12, 2023, which could materially affect our business, financial condition and/or operating results.

There are no material changes to the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Sales of Unregistered Securities

During the three months ended June 30, 2023, we issued 608,618 shares of our common stock under our dividend reinvestment plan. These issuances were not subject to the registration requirements of the Securities Act of 1933, as amended. The aggregate value of the shares of common stock issued during the three months ended June 30, 2023 under the DRIP was $4.8 million.

On May 1, 2023, we sold 255,754 shares of our common stock to Main Street at $7.82 per share, the

price at which we issued new shares in connection with reinvestments of the May 1, 2023 dividend pursuant

to the DRIP, for total proceeds to the Company of $2.0 million. The sale of shares was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

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Issuer Purchases of Equity Securities

The following chart summarizes repurchases of our common stock for the three months ended June 30, 2023.


Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs
April 1 through April 30, 2023(a)	558,664	$	7.67	519,489	N/A
May 1 through May 31, 2023	—	—		—	—
June 1 through June 30, 2023(b)	406,904	5.50		406,904	N/A
Total	965,568			926,393

_________________

(a)Shares repurchased under the quarterly share repurchase program at NAV (see Note G — Share Repurchases included in Item 1. Consolidated Financial Statements for more information).

(b)Shares repurchased under the Modified Dutch Auction Tender Offer (see Liquidity and Capital Resources included in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information).

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Item 6. Exhibits

Listed below are the exhibits which are filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K):


Exhibit Number						Description of Exhibit
10.1						First Amendment to Loan and Security Agreement, dated June 2, 2023, by and among MSIF Funding, LLC, as borrower; MSC Income Fund, Inc., as portfolio manager; U.S. Bank Trust Company, National Association, as collateral agent and collateral administrator; U.S. Bank National Association, as securities intermediary; and JPMorgan Chase Bank, National Association, as administrative agent and lender (filed as Exhibit 10.1 to the Registrant’s current report on Form 8-K filed on June 6, 2023 (File No. 814-00939) and incorporated herein by reference).
31.1						Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2						Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1						Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
32.2						Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).
101						The following financial information from our Quarterly Report on Form 10-Q for the second quarter of fiscal year 2023, filed with the SEC on August 11, 2023, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets at June 30, 2023 and December 31, 2022, (ii) the Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022, (iii) the Consolidated Statements of Changes in Net Assets for the periods ended June 30, 2023 and 2022, (iv) the Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022, (v) the Consolidated Schedule of Investments for the periods ended June 30, 2023 and December 31, 2022, (vi) the Notes to Consolidated Financial Statements and (vii) the Consolidated Schedule 12-14 for the six months ended June 30, 2023 and 2022.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			MSC INCOME FUND, INC.

Date: August 11, 2023			/s/ DWAYNE L. HYZAK
			Dwayne L. Hyzak
			Chief Executive Officer
			(principal executive officer)

Date: August 11, 2023			/s/ JESSE E. MORRIS
			Jesse E. Morris
			Chief Financial Officer and Chief Operating Officer
			(principal financial officer)

Date: August 11, 2023			/s/ CORY E. GILBERT
			Cory E. Gilbert
			Vice President and Chief Accounting Officer
			(principal accounting officer)

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